EXHIBIT 10.1
$65,000,000
CREDIT AGREEMENT
Dated as of April 24, 1998
Among
IRON AGE CORPORATION
as Borrower
-- --------
and
IRON AGE HOLDINGS CORPORATION
as Parent Guarantor
-- ------ ---------
and
THE INITIAL LENDERS NAMED HEREIN
and
BANQUE NATIONALE DE PARIS
as Agent, Initial Issuing Bank and Swing Line Bank
-- ----- ------- ------- ---- --- ----- ---- ----
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms............................................... 1
1.02. Computation of Time Periods; Other Definitional Provisions.......... 27
1.03. Accounting Terms.................................................... 27
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances........................................................ 28
2.02. Making the Advances................................................. 29
2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit.......................................................... 31
2.04. Repayment of Advances............................................... 32
2.05. Termination or Reduction of the Commitments......................... 34
2.06. Prepayments......................................................... 35
2.07. Interest............................................................ 38
2.08. Fees................................................................ 38
2.09. Conversion of Advances.............................................. 39
2.10. Increased Costs, Etc................................................ 40
2.11. Payments and Computations........................................... 41
2.12. Taxes............................................................... 42
2.13. Sharing of Payments, Etc............................................ 44
2.14. Use of Proceeds..................................................... 45
2.15. Evidence of Debt.................................................... 45
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit................. 46
3.02. Conditions Precedent to Each Borrowing, Swing Line Advance
and Issuance of Letters of Credit.................................. 52
3.03. Determinations Under Section 3.01................................... 52
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SECTION PAGE
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower and the
Parent Guarantor................................................... 53
ARTICLE V
COVENANTS OF THE BORROWER AND THE PARENT GUARANTOR
5.01. Affirmative Covenants............................................... 59
5.02. Negative Covenants.................................................. 64
5.03. Reporting Requirements.............................................. 73
5.04. Financial Covenants................................................. 77
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default................................................... 80
6.02. Actions in Respect of the Letters of Credit upon Default............ 82
ARTICLE VII
PARENT GUARANTY
7.01. Guaranty............................................................ 83
7.02. Guaranty Absolute................................................... 83
7.03. Waiver.............................................................. 84
7.04. Payments Free and Clear of Taxes, Etc............................... 84
7.05. Continuing Guaranty; Assignments.................................... 86
7.06. Subrogation......................................................... 86
ARTICLE VIII
THE AGENT
8.01. Authorization and Action............................................ 87
8.02. Agent's Reliance, Etc............................................... 87
8.03. BNP and Affiliates.................................................. 88
8.04. Lender Party Credit Decision........................................ 88
8.05. Indemnification..................................................... 88
8.06. Successor Agents.................................................... 89
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SECTION PAGE
ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc..................................................... 90
9.02. Notices, Etc........................................................ 91
9.03. No Waiver; Remedies................................................. 91
9.04. Costs and Expenses.................................................. 92
9.05. Right of Setoff..................................................... 93
9.06. Binding Effect...................................................... 93
9.07. Assignments and Participations...................................... 94
9.08. Execution in Counterparts........................................... 96
9.09. No Liability of the Issuing Bank.................................... 96
9.10. Jurisdiction, Etc................................................... 97
9.11. Governing Law....................................................... 97
9.12. WAIVER OF JURY TRIAL................................................ 97
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SCHEDULES
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Schedule I - Commitments and Applicable Lending Offices
Schedule II - Employment/Non-Compete Agreements
Schedule III - Retirement Benefit Plan Payees
Schedule 3.01(i) - Surviving Debt
Schedule 3.01(k)(xxiii) - Blocked Accounts
Schedule 4.01(a) - Investor Group and Share Ownership
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and
Filings
Schedule 4.01(l) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(u) - Environmental Matters
Schedule 4.01(z) - Open Years
Schedule 4.01(ff) - Existing Debt
Schedule 4.01(gg) - Owned Real Property
Schedule 4.01(hh) - Leased Real Property
Schedule 4.01(ii) - Investments
Schedule 4.01(jj) - Intellectual Property
Schedule 5.02(a)(iii) - Existing Liens
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EXHIBITS
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Exhibit A-1 - Form of Working Capital Note
Exhibit A-2 - Form of Acquisition Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Mortgage
Exhibit F - Form of Intercompany Subordination Agreement
Exhibit G - Form of Intellectual Property Security Agreement
Exhibit H - Form of Canadian Security Agreement
Exhibit I - Form of Subsidiary Guaranty
Exhibit J - Form of Borrowing Base Certificate
Exhibit K - Form of Opinion of Special Counsel to the Loan Parties
Exhibit L - Form of Opinion of Local Counsel to the Lender Parties
Exhibit M-1 - Form of Borrower Solvency Certificate
Exhibit M-2 - Form of Parent Guarantor Solvency Certificate
Exhibit O - Form of Assignment of Life Insurance Policy
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of April 24, 1998 among Iron Age
Corporation, a Delaware corporation (the "Borrower"), Iron Age Holdings
--------
Corporation, a Delaware corporation (the "Parent Guarantor"), the banks,
----------------
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "Initial Lenders"), Banque Nationale de
---------------
Paris ("BNP"), as the swing line bank (the "Swing Line Bank"), and as agent
--- ---------------
(together with any successor appointed pursuant to Article VIII, the "Agent")
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for the Lender Parties (as hereinafter defined), and BNP, as initial issuing
bank (the "Initial Issuing Bank").
--------------------
PRELIMINARY STATEMENTS:
(1) Fenway Fund (as hereinafter defined) and certain investors listed
on Part I of Schedule 4.01(a) (the "Investor Group") own all of the outstanding
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capital stock of the Parent Guarantor. The Parent Guarantor owns directly all
of the outstanding capital stock of the Borrower.
(2) The Borrower has requested that the Lender Parties lend to the
Borrower up to $65,000,000 in order to refinance certain existing indebtedness
of the Borrower and to pay transaction fees and expenses in connection therewith
and the other transactions contemplated hereby (collectively, the "Refinancing")
-----------
and to provide working capital for the Borrower and its Subsidiaries (as
hereinafter defined) and for other general corporate purposes permitted under
this Agreement, including, subject to certain terms and conditions as
hereinafter provided, acquisitions.
(3) The Lender Parties have indicated their willingness to agree to
lend such amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition Advance" has the meaning specified in Section 2.01(d).
-------------------
"Acquisition Borrowing" means a borrowing consisting of simultaneous
---------------------
Acquisition Advances of the same Type made by the Acquisition Lenders.
"Acquisition Commitment" means, with respect to any Acquisition Lender
----------------------
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Acquisition
2
Commitment" or, if such Lender has entered into one or more Assignment and
Acceptances, the amount set forth for such Lender in the Register
maintained by the Agent pursuant to Section 9.07(d) as such Lender's
"Acquisition Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05.
"Acquisition Facility" means, at any time, the aggregate amount of the
--------------------
Acquisition Lenders' Acquisition Commitments at such time.
"Acquisition Lender" means any Lender that has an Acquisition
------------------
Commitment.
"Acquisition Note" means a promissory note of the Borrower payable to
----------------
the order of any Acquisition Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Acquisition Advances made by such Lender.
"Acquisition Reduction Amount" has the meaning specified in Section
----------------------------
2.06(b)(vi).
"Advance" means an Acquisition Advance, a Working Capital Advance, a
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Letter of Credit Advance or a Swing Line Advance.
"Affiliate" means, as to any Person, any other Person that, directly
---------
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to this
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Agreement.
"Agent Indemnified Costs" has the meaning specified in Section
-----------------------
8.05(a).
"Agent's Account" means the account of the Agent maintained by the
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Agent at the Federal Reserve Bank of New York, 00 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, ABA No. 000000000, for further credit to Account No.
750420-701-03, or such other account maintained by the Agent and designated
by the Agent in a written notice to the Lender Parties and the Borrower.
"Applicable Lending Office" means, with respect to each Lender Party,
-------------------------
such Lender Party's Domestic Lending Office in the case of a Base Rate
Advance and such Lender Party's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means a percentage per annum determined by
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reference to the ratio of (i) Funded Debt of the Borrower and its
Subsidiaries as of such date to (ii) Consolidated EBITDA of the Parent
Guarantor and its Subsidiaries for the four fiscal quarters ended on or
most recently prior to such date as set forth below:
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====================================================================================
Funded Debt to EBITDA Base Rate Eurodollar Rate
Ratio Advances Advances
------------------------------------------------------------------------------------
Level I
-------
less than 4.50 : 1.00 0.250% 1.750%
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Level II
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greater than or equal to 4.50 :
1.00 but less than 5.25 : 1.00 0.500% 2.000%
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Level III
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greater than or equal to 5.25 :
1.00 but less than 6.00 : 1.00 0.750% 2.250%
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Level IV
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greater than or equal to 1.000% 2.500%
6.00 : 1.00
===================================================================================
The Applicable Margin for each Advance shall be determined by reference to
the ratio in effect from time to time; provided, however, that (A) no
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change in the Applicable Margin shall be effective until three Business
Days after the date on which the Agent receives the financial statements
required to be delivered pursuant to Section 5.03(b) or 5.03(c), as the
case may be, and a certificate of the chief financial officer of the
Borrower demonstrating such ratio and (B) the Applicable Margin shall be at
Level IV for so long as the Borrower has not submitted to the Agent the
information described in clause (A) of this proviso as and when required
under Section 5.03(b) or 5.03(c), as the case may be; and provided further
-------- -------
that, until the financial statements for the period ended October 31, 1998
are delivered, the Applicable Margin shall be at least Level III; and
provided further that the Applicable Margin in effect immediately after an
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Investment by the Borrower permitted by Section 5.02(f)(xvii) shall be at
the Level described above based on the Leverage Ratio described in the
certificate required to be delivered pursuant to Section 5.02(f)(xvii)(5).
"Application Date" has the meaning specified in Section 2.06(b)(viii).
----------------
"Appropriate Lender" means, at any time, with respect to (a) either
------------------
the Acquisition Facility or the Working Capital Facility, a Lender that has
a Commitment with respect to such Facility at such time and (b) the Letter
of Credit Facility, (i) the Issuing Bank and (ii) if the other Working
Capital Lenders have made Letter of Credit Advances pursuant to Section
2.03(c) that are outstanding at such time, each such other Working Capital
Lender and (c) the Swing Line Advances, (i) the Swing Line Bank and (ii) if
the other Working Capital Lenders have made Swing Line Advances pursuant to
Section 2.02(b) that are outstanding at such time, each such other Working
Capital Lender.
"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by a Lender Party and an Eligible Assignee and accepted by the Agent,
in accordance with Section 9.07 and in substantially the form of Exhibit C
hereto.
"Assignment of Life Insurance Policy" means an assignment of the key
-----------------------------------
man life insurance policy on Xxxxxx X. Xxxxxx assigned by the Borrower to
the Agent for the benefit of the Secured Parties in accordance with Section
5.01(d) and in substantially the form of Exhibit O hereto.
4
"Available Amount" of any Letter of Credit means, at any time, the
----------------
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect from
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time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by BNP in New York,
New York, from time to time, as its prime rate (and such term shall
not be construed to be its best or most favorable rate); and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
-----------------
in Section 2.07(a)(i).
"Blocked Account Bank" has the meaning specified in Section 6 of the
--------------------
Security Agreement.
"Blocked Account Letter" means each blocked account letter, in
----------------------
substantially the form of Exhibit A to the Security Agreement, entered into
by the Borrower, the Agent and a Blocked Account Bank.
"BNP" has the meaning specified in the recital of parties to this
---
Agreement.
"Borrower" has the meaning specified in the recital of parties to this
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Agreement.
"Borrower's Account" means the account of the Borrower maintained by
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the Borrower with BNP at BNP's office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Account No. 202905-001-28, or such other account as the
Borrower and the Agent may from time to time designate as the "Borrower's
Account".
"Borrowing" means an Acquisition Borrowing, a Working Capital
---------
Borrowing or a Swing Line Borrowing.
"Borrowing Base Certificate" means a certificate in substantially the
--------------------------
form of Exhibit J hereto, duly certified by the chief financial officer of
the Borrower.
"Business Day" means a day of the year on which banks are not required
------------
or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Canadian Security Agreement" has the meaning specified in Section
---------------------------
3.01(k)(xx).
"Capital Expenditures" means, for any Person for any period, the sum
--------------------
of, without duplication, (a) all cash expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such period
for equipment, fixed assets, real property or improvements, or for
replacements or
5
substitutions therefor or additions thereto, that have been or should be,
in accordance with GAAP, reflected as additional property, plant or
equipment on a Consolidated balance sheet of such Person plus (b) the
aggregate principal amount of all Debt (including Obligations under
Capitalized Leases) assumed or incurred in connection with any such
expenditures.
"Capitalized Leases" means all leases that have been or should be, in
------------------
accordance with GAAP, recorded as capitalized leases.
"Carryover Amount" has the meaning specified in Section 5.04(d).
----------------
"Cash Equivalents" means any of the following, to the extent owned by
----------------
the Borrower free and clear of all Liens other than Liens created under the
Collateral Documents and having a maturity of not greater than 180 days
from the date of acquisition thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the
full faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits or repurchase agreements with
any commercial bank that is a Lender Party or a member of the Federal
Reserve System, which issues (or the parent of which issues) commercial
paper rated as described in clause (c) below, is organized under the laws
of the United States or any State thereof and has combined capital and
surplus of at least $1,000,000,000, (c) commercial paper in an aggregate
amount of no more than $250,000 per issuer outstanding at any time, issued
by any corporation organized under the laws of any state of the United
States and rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Services or (d) money market or mutual funds that
invest solely in Cash Equivalents of the types described in clauses (a),
(b) and (c) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation
------
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
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and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"Collateral" means all "Collateral" and "Intellectual Property
---------- ---------- ---------------------
Collateral" referred to in the Collateral Documents and all other property
----------
that is or is intended to be subject to any Lien in favor of the Agent for
the benefit of the Secured Parties.
"Collateral Documents" means the Security Agreement, the Intellectual
--------------------
Property Security Agreement, the Canadian Security Agreement, the Mortgage
and any other agreement that creates or purports to create a Lien in favor
of the Agent for the benefit of the Secured Parties.
"Commitment" means an Acquisition Commitment, a Working Capital
----------
Commitment, a Letter of Credit Commitment or a Swing Line Commitment.
"Commitment Date" shall have the meaning specified in Section
---------------
2.06(b)(viii).
6
"Consolidated" refers, with respect to any Person, to the
------------
consolidation of accounts of such Person and its Subsidiaries in accordance
with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
---------- ------- ---------
Advances of one Type into Advances of the other Type pursuant to Section
2.09 or 2.10.
"Conversion Date" means the last day of the calendar month in the
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month that is the 36th month following the month in which the Initial
Extension of Credit occurred.
"Current Assets" of any Person means all assets of such Person that
--------------
would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a reserve
is proper in accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such Person
-------------------
that by its terms is payable on demand or matures within one year after the
date of determination other than Funded Debt and (b) all other items
(including, without limitation, taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of a
company conducting a business the same as or similar to that of such
Person.
"Debt" of any Person means, without duplication, (a) all indebtedness
----
of such Person for borrowed money, (b) all Obligations, contingent or
otherwise, of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 60 days
incurred in the ordinary course of such Person's business), (c) all
Obligations, contingent or otherwise, of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations,
contingent or otherwise, of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations,
contingent or otherwise, of such Person as lessee under Capitalized Leases,
(f) all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations,
contingent or otherwise, of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital stock of or
other ownership or profit interest in such Person or any other Person or
any warrants, rights or options to acquire such capital stock, valued, in
the case of Redeemable Preferred Stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (h)
----
all Obligations, contingent or otherwise, of such Person in respect of
Hedge Agreements (other than for purposes of calculating the financial
covenants in Section 5.04), (i) all Debt of others referred to in clauses
(a) through (h) above or clause (j) below guaranteed directly or indirectly
in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (1) to pay or purchase such
Debt or to advance or supply funds for the payment or purchase of such
Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against
loss, (3) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (4)
otherwise to assure a creditor against loss, and (j) all Debt referred to
in
7
clauses (a) through (i) above and other payment obligations of another
Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Debt.
"Default" means any Event of Default or any event that would
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constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Discount Note Documents" means (i) the Discount Note Indenture and
-----------------------
(ii) any other agreements, indentures and instruments delivered in
connection with the issuance of the Discount Notes.
"Discount Note Indenture" means the Indenture dated as of April 24,
-----------------------
1998 among the Parent Guarantor and The Chase Manhattan Bank, as trustee.
"Discount Notes" means the Senior Discount Notes due 2009 of the
--------------
Parent Guarantor in an aggregate initial principal amount of $25,000,000
issued pursuant to the Discount Note Indenture.
"Domestic Lending Office" means, with respect to any Lender Party, the
-----------------------
office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Agent.
"EBITDA" means, for any period, the sum, determined on a Consolidated
------
basis, of (a) net income (or net loss) measured on a first-in, first-out
method of accounting, (b) Interest Expense, (c) income tax expense, (d)
depreciation expense, (e) amortization expense, (f) extraordinary or
unusual losses deducted in calculating net income less extraordinary or
----
unusual gains added in calculating net income, (g) to the extent deducted
in calculating net income (or net loss), non-cash expenses associated with
any stock based compensation, (h) the management fee paid under the Fenway
Management Agreement, and (i) a one-time bonus to certain members of
management of the Borrower not to exceed $2,300,000 in the aggregate to be
paid on or before December 31, 1999, in each case determined in accordance
with GAAP for such period; provided that, for purposes of determining the
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Leverage Ratio and the Senior Leverage Ratio for each month ending prior to
one year after the date of the Initial Extension of Credit, EBITDA shall be
the amount for such month as set forth on Schedule II hereto.
"Eligible Assignee" means (a) with respect to any Facility (other than
-----------------
the Letter of Credit Facility): (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United
States, or any state thereof, and having a combined capital and surplus of
at least $500,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $500,000,000; (v) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to
Borrow or a political subdivision of any such country,
8
and having a combined capital and surplus of at least $500,000,000, so long
as such bank is acting through a branch or agency located in the United
States; (vi) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other
entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having a
combined capital and surplus of at least $250,000,000; and (vii) any other
Person approved by the Agent and, so long as no Default has occurred and is
continuing at the time any assignment is effected pursuant to Section 9.07,
the Borrower and, with respect to any Eligible Assignee that becomes a
Working Capital Lender, the Issuing Bank, any such approval not to be
unreasonably withheld or delayed and (b) with respect to the Letter of
Credit Facility, a Person that is an Eligible Assignee under subclause
(iii) or (v) of clause (a) of this definition and is approved by the Agent
and, so long as no Default has occurred and is continuing at the time any
assignment is effected pursuant to Section 9.07, the Borrower, such
approval not to be unreasonably withheld or delayed; provided, however,
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that neither any Loan Party nor any Affiliate of a Loan Party shall qualify
as an Eligible Assignee under this definition.
"Eligible Canadian Inventory" means Eligible Inventory of IA Canada.
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"Eligible Canadian Receivables" means Eligible Receivables of IA
-----------------------------
Canada.
"Eligible Collateral" means, collectively, Eligible Inventory and
-------------------
Eligible Receivables.
"Eligible Inventory" means any Inventory owned by the Borrower, Falcon
------------------
or IA Canada free and clear of all Liens (other than Permitted Liens and
Liens in favor of the Secured Parties securing the Secured Obligations)
other than the following:
(a) Inventory consisting of "perishable agricultural
commodities" within the meaning of the Perishable Agricultural
Commodities Act of 1930, as amended, and the regulations thereunder,
or on which a Lien has arisen or may arise in favor of agricultural
producers under comparable state or local laws;
(b) Inventory aggregating more than $500,000 at any single
location and located on leaseholds as to which the lessor has not
entered into a consent and agreement providing the Agent with the
right to receive notice of default, the right to repossess such
Inventory at any time and such other rights as may be acceptable to
the Agent;
(c) Inventory that is obsolete, unusable or otherwise
unavailable for sale;
(d) Inventory with respect to which the representations and
warranties set forth in Section 8 of the Security Agreement applicable
to Inventory are not true and correct;
(e) Inventory consisting of promotional, marketing, packaging or
shipping materials and supplies exclusive of boxes containing shoes or
boots;
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(f) Inventory that fails to meet in any material respect all
standards imposed by any governmental agency, or department or
division thereof, having regulatory authority over such Inventory or
its use or sale;
(g) Inventory that is subject to any licensing, patent, royalty,
trademark, trade name or copyright agreement with any third party from
whom any Loan Party or any of its Subsidiaries has received written
notice of a material dispute in respect of any such agreement;
(h) Inventory located outside the United States, Puerto Rico or
Canada, other than as permitted under paragraph (i) below;
(i) Inventory that is not in the possession of or under the sole
control of the Borrower, Falcon or IA Canada, other than (i) up to
$4,000,000 at any one time outstanding of Inventory in transit to the
Borrower, Falcon or IA Canada by common carrier, which Inventory is
owned by the Borrower, Falcon or IA Canada free and clear of all Liens
(other than Liens imposed by such common carrier in the ordinary
course of business in respect of the shipping of such Inventory) and
insured in accordance with Section 11(a) of the Security Agreement or
Section 1.9 of the Canadian Security Agreement with the Agent named as
loss payee under such insurance policy and (ii) any Inventory of the
Borrower or Falcon located on any customer's premises; provided that
--------
such Inventory must be segregated from all inventory of such customer
and must be clearly identifiable as Inventory of the Borrower or
Falcon; provided further that any such Inventory on consignment on any
-------- -------
customer's premises must also be subject to UCC-1 protective filings;
(j) Inventory consisting of work in progress; and
(k) Inventory in respect of which the Security Agreement or the
Canadian Security Agreement, after giving effect to the related
filings of financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first priority lien
or security interest in favor of the Agent for the benefit of the
Secured Parties securing the Secured Obligations and as to which no
other Liens exist, other than Permitted Liens.
The value of such Eligible Inventory shall be its book value determined in
accordance with the "first-in, first-out" method of accounting for
inventory and in accordance with GAAP unless the Agent determines, in its
reasonable commercial judgment based on a liquidation analysis by an
independent asset appraiser of nationally recognized standing acceptable to
the Agent, that such Eligible Inventory shall be valued at a lower value.
"Eligible Receivables" means any Receivables owned by the Borrower,
--------------------
Falcon or IA Canada free and clear of all Liens (other than Permitted Liens
and Liens in favor of the Secured Parties securing the Secured Obligations)
other than the following:
(a) Receivables that do not arise out of the sale of goods or
the rendering of services in the ordinary course of the Borrower's,
Falcon's or IA Canada's business;
10
(b) Receivables on terms other than those normal or customary in
the Borrower's, Falcon's or IA Canada's business;
(c) Receivables owing (i) from any Loan Party or any of its
Subsidiaries or (ii) from any other Person that is an Affiliate of the
Borrower, Falcon or IA Canada other than Receivables owing by such
Affiliate which arose pursuant to transactions on terms which were
fair and reasonable and no less favorable to the Borrower, Falcon or
IA Canada, as the case may be, than those which would have been
obtained in a comparable arm's length transaction with a Person not an
Affiliate;
(d) Receivables (i) more than 90 days past original invoice date
(but excluding up to $1,500,000 of Receivables not more than 180 days
past original invoice date) or (ii) more than 60 days past the date
due;
(e) Solely with respect to Receivables owned by Falcon or IA
Canada, Receivables owing from, as determined as of January 31, 1998
and thereafter on the first Business Day of each fiscal quarter ended
January 31, April 30, July 31 and October 31, any Person (i) from
which an aggregate amount of more than 25% of the Receivables owing
are (A) more than 60 days past due or (B) in dispute or (ii) from
which an aggregate amount of 25% or less of the Receivables owing are
(A) more than 60 days past due or (B) in dispute, except that, with
respect to this clause (ii), only to the extent of those Receivables
which are more than 60 days past due and are in dispute;
(f) Receivables owing from any Person to the extent such Person
has asserted any claim, demand or liability, whether by action, suit,
counterclaim or other judicial or arbitral proceeding against any Loan
Party or any of its Subsidiaries; provided, however, that solely for
-------- -------
the purposes of this paragraph (f), the term "Person" shall mean the
invoiced division that is the contractual obligor of such Receivable;
(g) Receivables owing from any Person that shall take or be the
subject of any action or proceeding of a type described in Section
6.01(f);
(h) Receivables representing any manufacturer's or supplier's
credits, discounts, incentive plans or similar arrangements entitling
any Loan Party to discounts on future purchases therefrom;
(i) Receivables arising out of sales to account debtors outside
the United States, Puerto Rico or Canada, unless backed by a letter of
credit issued by a bank organized under the laws of the United States,
or any state thereof, and having a combined capital and surplus of at
least $500,000,000;
(j) Receivables arising out of sales on a xxxx-and-hold,
guaranteed sale, sale-or-return, sale on approval or consignment basis
or subject to any right of return, setoff or charge-back; and
11
(k) Receivables in respect of which the Security Agreement or
the Canadian Security Agreement, after giving effect to the related
filings of financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first priority lien
on or security interest in favor of the Agent for the benefit of the
Secured Parties securing the Secured Obligations and as to which no
other Liens exist, other than Permitted Liens.
The value of such Eligible Receivables shall be their book value
(disregarding any reserves) determined in accordance with GAAP, unless the
Agent determines in its reasonable commercial judgment, based on a
liquidation analysis by an independent asset appraiser of nationally
recognized standing acceptable to the Agent, that such Eligible Receivables
shall be valued at a lower value.
"Employment/Non-Compete Agreement" means each of the Employment/Non-
--------------------------------
Compete Agreements set forth on Schedule II hereto.
"Environmental Action" means any action, suit, demand, demand letter,
--------------------
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
-----------------
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
--------------------
number, license or other authorization required under any Environmental
Law.
"Equivalent" in U.S. dollars of any foreign currency on any date means
----------
the equivalent in U.S. dollars of such foreign currency determined by using
the quoted spot rate for an equivalent amount at which BNP's principal
office in New York City offers to exchange U.S. dollars for such foreign
currency in New York City prior to 11:00 A.M. (New York City time) on such
date as is required pursuant to the terms of this Agreement, and the
"Equivalent" in any foreign currency of U.S. dollars means the equivalent
----------
in such foreign currency of U.S. dollars determined by using the quoted
spot rate for an equivalent amount at which BNP's principal office in
London offers to exchange such foreign currency for U.S. dollars in New
York City prior to 11:00 A.M. (New York City time) on such date as is
required pursuant to the terms of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
12
"ERISA Affiliate" means any Person that for purposes of Title IV of
---------------
ERISA is a member of the controlled group of any Loan Party, or is under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
-----------
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC; or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are met
with respect to a contributing sponsor, as defined in Section 4001(a)(13)
of ERISA, of a Plan, and an event described in paragraph (9), (10), (11),
(12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such Plan within the following 30 days; (b) the application
for a minimum funding waiver with respect to a Plan; (c) the provision by
the administrator of any Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA); (d)
the cessation of operations at a facility of any Loan Party or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan, pursuant to Section 307 of ERISA;
or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for
the termination of, or the appointment of a trustee to administer, such
Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
------------------------
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
-------------------------
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party, as the case may be
(or, if no such office is specified, its Domestic Lending Office), or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
---------------
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the average of
the respective rates per annum (rounded upward to the next whole multiple
of 1/16th of 1%) posted by each of the principal London offices of banks
posting rates as displayed on the Telerate screen, page 3750 or such other
page as may replace such page on such service for the purpose of displaying
the London interbank offered rate of major banks for deposits in U.S.
dollars, at approximately 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period for deposits in an amount
substantially equal to BNP's Eurodollar Rate Advance comprising part of
such Borrowing to be outstanding during such Interest Period (or, if BNP
shall not have such a Eurodollar Rate Advance, $1,000,000) and for a period
equal to such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
13
"Eurodollar Rate Advance" means an Advance that bears interest as
-----------------------
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
----------------------------------
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
-----------------
"Excess Cash Flow" means, for any period, without duplication, the sum
----------------
of (a) Consolidated pretax income (or pretax loss) of the Parent Guarantor
and its Subsidiaries for such period less (b) Consolidated income tax
----
expense of the Parent Guarantor and its Subsidiaries for such period plus
----
(c) an amount equal to the aggregate amount of all noncash charges deducted
in arriving at Consolidated net income (or loss) of the Parent Guarantor
and its Subsidiaries for each such period plus (d) an amount (whether
----
positive or negative) equal to the change in Consolidated Current
Liabilities of the Parent Guarantor and its Subsidiaries during such period
plus (e) the Carryover Amount (if any) from the immediately prior period
----
not used in the current period less (f) an amount equal to the aggregate
----
amount of all noncash credits included in arriving at such Consolidated net
income (or loss) of the Parent Guarantor and its Subsidiaries less (g) an
----
amount (whether positive or negative) equal to the change in Consolidated
Current Assets (excluding cash and Cash Equivalents) of the Parent
Guarantor and its Subsidiaries during such period less (h) an amount equal
----
to the amount of all Capital Expenditures of the Parent Guarantor and its
Subsidiaries paid in cash during such period to the extent permitted by
this Agreement less (i) an amount equal to the aggregate amount of all
----
regularly scheduled principal payments of Funded Debt of the Parent
Guarantor and its Subsidiaries made during such period, and, from and after
the Conversion Date, any optional prepayments of the Acquisition Advances,
made during such period in accordance with Section 2.06(a) less (j) any
----
amounts included in Net Cash Proceeds to be prepaid under Section
2.06(b)(ii) to the extent included in pre-tax income less (k) the Carryover
----
Amount for the current period less (l) an amount equal to the cash cost of
----
any Hedge Agreements required pursuant to Section 5.01(n) less (m) an
----
amount equal to all Restricted Acquisitions to the extent made in cash (but
only to the extent that such amount is not funded by Borrowings under the
Acquisition Facility).
"Existing Debt" means Debt of the Borrower outstanding immediately
-------------
before the effectiveness of this Agreement.
"Extraordinary Receipt" means any cash received by or paid to or for
---------------------
the account of any Person not in the ordinary course of business,
including, without limitation, indemnity payments, tax refunds, pension
plan reversions, proceeds of insurance (including, without limitation, the
key man life insurance referred to in Section 5.01(d), but excluding
proceeds of business interruption insurance to
14
the extent such proceeds constitute compensation for lost earnings, and
excluding proceeds of any key man life insurance policy used to repurchase
stock or options of Xxxxxx X. Xxxxxx as permitted pursuant to Section
5.02(g)(ii) or loans to Xxxxxx X. Xxxxxx permitted pursuant to Section
5.02(f)(xv)), condemnation awards (and payments in lieu thereof), and any
purchase price adjustment received in connection with any purchase and sale
agreement; provided, however, that an Extraordinary Receipt shall not
-------- -------
include cash receipts received from proceeds of insurance or condemnation
awards to the extent that such proceeds in respect of loss or damage to
equipment, fixed assets or real property are applied (or in respect of
which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds
were received in accordance with the terms of the Loan Documents, so long
as such application is made (or such expenditures were incurred) within six
months after the occurrence of such damage or loss covered by such
insurance proceeds or within six months after the receipt of such
condemnation award, as the case may be.
"Facility" means the Acquisition Facility, the Working Capital
--------
Facility, the Swing Line Facility or the Letter of Credit Facility.
"Falcon" means Falcon Shoe Mfg. Co., a Maine corporation and a wholly-
------
owned subsidiary of the Borrower.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period (i) to the rate
published by the Telerate service on page five of its daily report as the
"ASK" rate as of 10:00 A.M. (New York City time) for such day (or, if such
day is not a Business Day, for the immediately preceding Business Day) or
(ii) if the Telerate service shall cease to publish or otherwise shall not
publish such rates for any day that is a Business Day, to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Agent from three Federal funds brokers of recognized standing selected
by it.
"Fenway Fund" means Fenway Partners Capital Fund, L.P.
-----------
"Fenway Management Agreement" means the Management Agreement dated
---------------------------
February 26, 1997 between the Borrower and Fenway Partners, Inc., a
Delaware corporation.
"Fiscal Year" means a fiscal year of the Parent Guarantor and its
-----------
Consolidated Subsidiaries ending on the last Saturday in January of any
calendar year.
"Fixed Charge Coverage Ratio" means the ratio of (a) Consolidated
---------------------------
EBITDA for the Parent Guarantor and its Subsidiaries for a Rolling Period
less the sum of (i) Capital Expenditures of the Parent Guarantor and its
----
Subsidiaries paid in cash during such Rolling Period and (ii) income taxes
of the Parent Guarantor and its Subsidiaries that have been paid in cash
during such Rolling Period to (b) the sum of (i) Interest Expense of the
Parent Guarantor and its Subsidiaries for such Rolling
15
Period and (ii) regularly scheduled principal payments of Funded Debt of
the Parent Guarantor and its Subsidiaries made during such Rolling Period.
"Foreign Subsidiary" means any direct or indirect Subsidiary of the
------------------
Parent Guarantor that is organized under the laws of a jurisdiction other
than the United States or any state thereof or the District of Columbia.
"Funded Debt" of any Person means Debt (other than Debt in respect of
-----------
the Borrower's obligation created upon the Borrower's exercise of its right
to purchase employee options or stock after the termination of such
employee) of such Person that by its terms matures more than one year after
the date of creation or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than
one year after such date or arises under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during a
period of more than one year after such date, including, without
limitation, all amounts of Funded Debt of such Person required to be paid
or prepaid within one year after the date of determination.
"GAAP" has the meaning specified in Section 1.03.
----
"Guaranteed Obligations" has the meaning specified in Section 7.01.
----------------------
"Guarantor" means the Parent Guarantor and the Subsidiary Guarantors.
---------
"Hazardous Materials" means (a) petroleum or petroleum products, by-
-------------------
products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other
chemicals, materials or substances designated, classified or regulated as
hazardous or toxic or as a pollutant or contaminant under any Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
----------------
interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other hedging agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates in its
----------
capacity as a party to a Secured Hedge Agreement.
"IAIC" means Iron Age Investment Company, a Delaware corporation and a
----
wholly-owned Subsidiary of the Borrower.
"IA Canada" means Iron Age Canada, Ltd., a Canadian corporation and a
---------
wholly-owned Subsidiary of the Borrower.
"IAC U.S. Operations" means the Borrower and all of its Subsidiaries
-------------------
other than Foreign Subsidiaries.
"Indemnified Party" has the meaning specified in Section 9.04(b).
-----------------
16
"Independent Shoe Distributorship Acquisition" means the purchase or
--------------------------------------------
acquisition of all or substantially all of the assets or stock of the shoe
distributorship business of an independently owned shoe distributorship.
"Information Memorandum" means the Offering Memorandum dated April 21,
----------------------
1998 relating to the Senior Subordinated Notes.
"Initial Extension of Credit" means the earlier to occur of the
---------------------------
initial Borrowing hereunder and the initial issuance of a Letter of Credit
hereunder.
"Initial Issuing Bank" has the meaning specified in the recital of
--------------------
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of parties
---------------
to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any,
-------------
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Intellectual Property Security Agreement" has the meaning specified
----------------------------------------
in Section 3.01(k)(xix).
"Intercompany Subordinated Debt Documents" means the Intercompany
----------------------------------------
Subordination Agreement, all documents required to be delivered pursuant to
Section 5.02(b)(i)(G) and all other agreements, indentures and instruments
delivered in connection with the issuance of such Debt.
"Intercompany Subordination Agreement" has the meaning set forth in
------------------------------------
Section 3.01(k)(xxvi).
"Interest Coverage Ratio" means the ratio of (a) Consolidated EBITDA
-----------------------
of the Parent Guarantor and its Subsidiaries for a Rolling Period to (b)
Interest Expense of the Parent Guarantor and its Subsidiaries for such
Rolling Period.
"Interest Expense" means, with respect to any Person for any period,
----------------
the amount by which (a) interest expense (including the interest component
on obligations under Capitalized Leases but excluding, to the extent
included in interest expense, (i) paid-in-kind interest, (ii) the
amortization of any non-cash interest expense relating to commitment fees
payable by such Person on the date of the Initial Extension of Credit,
(iii) the accretion of the original issue discount created upon the
issuance of the Discount Notes, and (iv) the underwriting fee, agency fee,
reimbursement expenses, including legal fees, and other similar amounts
incurred in connection with this Agreement, the Discount Notes and the
Senior Subordinated Notes), whether paid or accrued, on all Debt of such
Person and its Subsidiaries for such period, including, without limitation
and without duplication, (A) interest expense in respect of Debt resulting
from Advances, (B) interest expense in respect of Subordinated Debt (other
than paid-in-kind interest) and (C) any net payment payable in connection
with Hedge Agreements less any net credits received in connection with
----
Hedge Agreements exceeds (b) interest income, whether paid or accrued, of
such Person for such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
---------------
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the
17
Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and
ending on the last day of the period selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be one, two, three
or six months, as the Borrower may, upon notice received by the Agent not
later than 1:00 P.M. (New York City time) on the third Business Day prior
to the first day of such Interest Period, select; provided, however, that:
-------- -------
(a) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance under a Facility that ends after any
principal repayment installment date for such Facility unless, after
giving effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day; provided, however, that, if such extension would cause
-------- -------
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the immediately preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" means all Inventory referred to in Section 1(b) of the
---------
Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
----------
any purchase or other acquisition of any capital stock or other ownership
or profit interest, warrants, rights, options, obligations or other
securities or the assets comprising a business or an operating division of
a business of such Person, any capital contribution to such Person or any
other direct or indirect investment in such Person, including, without
limitation, any arrangement pursuant to which the investor incurs Debt of
the types referred to in clause (i) or (j) of the definition of "Debt" in
----
respect of such Person.
"Investor Group" has the meaning specified in the Preliminary
--------------
Statements.
18
"Issuing Bank" means the Initial Issuing Bank and any other Working
------------
Capital Lender approved as an Issuing Bank by the Agent and each Eligible
Assignee to which a Letter of Credit Commitment hereunder has been assigned
pursuant to Section 9.07.
"Issuing Bank Indemnified Costs" has the meaning specified in Section
------------------------------
8.05(b).
"L/C Cash Collateral Account" has the meaning specified in the
---------------------------
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
---------------------
2.04(c)(ii)(A).
"Lender Party" means any Lender, the Issuing Bank or the Swing Line
------------
Bank.
"Lenders" means the Initial Lenders and each Person that shall become
-------
a Lender hereunder pursuant to Section 9.07 for so long as such Initial
Lender or Person shall be a party to this Agreement.
"Letter of Credit Advance" means an advance made by the Issuing Bank
------------------------
or any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
--------------------------
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank
---------------------------
at any time, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or, if
the Issuing Bank has entered into an Assignment and Acceptance, set forth
for the Issuing Bank in the Register maintained by the Agent pursuant to
Section 9.07(d) as the Issuing Bank's "Letter of Credit Commitment", as
such amount may be reduced at or prior to such time pursuant to Section
2.05.
"Letter of Credit Facility" means, at any time, an amount equal to the
-------------------------
amount of the Issuing Bank's Letter of Credit Commitment at such time.
"Letters of Credit" has the meaning specified in Section 2.01(c).
-----------------
"Leverage Ratio" means the ratio of (a) Funded Debt (other than (i)
--------------
contingent obligations of the type described in clause (f) or (h) in the
definition of "Debt" and (ii) Seller Subordinated Debt) of the Borrower and
----
its Subsidiaries as of the last day of a Rolling Period to (b) an amount
equal to Consolidated EBITDA of the Parent Guarantor and its Subsidiaries
for the most recently completed Rolling Period for which financial
statements have been provided; provided that such Consolidated EBITDA shall
--------
include the Pro Forma EBITDA of or attributable to any Restricted
Acquisition or any Independent Shoe Distributorship Acquisition for such
Rolling Period.
"Lewiston Lease" has the meaning specified in Section 3.01(k)(ix).
--------------
19
"Lien" means any lien, security interest or other charge or
----
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the
--------------
Notes and any amendment, supplement or modification hereof or thereof, (i)
this Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each
Letter of Credit Agreement, and (v) the Subsidiary Guaranty and (b) for all
other purposes other than for purposes of this Agreement and the Notes, (i)
this Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each
Letter of Credit Agreement, (v) the Subsidiary Guaranty, (vi) each Secured
Hedge Agreement, (vii) each agreement entered into between any Loan Party
and the Agent or the Issuing Bank with respect to the payment of fees or
other amounts relating to the Facilities, (viii) the Blocked Account
Letters, and (ix) any other agreement, document or instrument issued
pursuant to or in connection with any of the foregoing and, in each case,
as amended and restated, supplemented or otherwise modified from time to
time.
"Loan Parties" means the Borrower, the Parent Guarantor, the
------------
Subsidiary Guarantors and each Subsidiary of the Borrower that may become a
guarantor or collateral grantor pursuant to Section 5.01(m).
"Loan Value" means an amount equal to the sum of the percentage of the
----------
value of each item of Eligible Collateral of up to the following amounts:
(a) with respect to Eligible Inventory (other than Eligible
Canadian Inventory), up to 50% of the value of such Inventory;
(b) with respect to Eligible Canadian Inventory, up to 50% of the
U.S. dollar Equivalent of the value of such Inventory;
(c) with respect to Eligible Receivables (other than Eligible
Canadian Receivables), up to 80% of the value of such Receivables; and
(d) with respect to Eligible Canadian Receivables, up to 80% of
the U.S. dollar Equivalent of the value of such Receivables;
provided, however, that the Agent may, in its reasonable commercial
-------- -------
judgment based on an audit or field examination and on its analysis of
changes in any Loan Party's operations or credit and collection experience
arising after the date hereof that may dilute the value of Eligible
Collateral, revise from time to time the percentage of the value of any
individual item of Eligible Collateral that shall be used in determining
Loan Value; provided further that the Loan Value of the sum of the Eligible
-------- -------
Canadian Inventory and the Eligible Canadian Receivables shall not exceed
the amount owing from IA Canada to the Borrower under the intercompany note
to the extent permitted pursuant to Section 5.02(b)(i)(G) at such time.
"Margin Stock" has the meaning specified in Regulation U.
------------
20
"Material Adverse Change" means any material adverse change in the
-----------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the other Loan Parties and their
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the other Loan Parties and their
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent or
any Lender Party under any Transaction Document or (c) the ability of any
Loan Party to perform its Obligations under any Transaction Document to
which it is or is to be a party.
"Mortgage" has the meaning specified in Section 3.01(k)(viii).
--------
"Mortgage Policy" has the meaning specified in Section
---------------
3.01(k)(viii)(A).
"Multiemployer Plan" means a multiemployer plan, as defined in Section
------------------
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
----------------------
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
-----------------
or other disposition of any asset or the sale or issuance of any Debt or
capital stock or other ownership or profit interest, any securities
convertible into or exchangeable for capital stock or other ownership or
profit interest (including, without limitation, any capital contribution)
or any warrants, rights, options or other securities to acquire capital
stock or other ownership or profit interest by any Person, or any
Extraordinary Receipt received by or paid to or for the account of any
Person, the aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a)
brokerage commissions, underwriting fees and discounts, legal fees,
finder's fees and other similar transaction fees and commissions, (b) the
amount of taxes payable in connection with or as a result of such
transaction and (c) the amount of any Debt secured by a Lien on such asset
that, by the terms of the agreement or instrument governing such Debt, is
required to be repaid upon such disposition, in each case to the extent,
but only to the extent, that the amounts so deducted are properly
attributable to such transaction or to the asset that is the subject
thereof and are, in the case of clauses (a) and (c), at the time of receipt
of such cash, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and, in the
case of clause (b), on the earlier of the dates on which the tax return
covering such taxes is filed or required to be filed; provided, however,
-------- -------
that in the case of taxes that are deductible under clause (b) above but
for the fact that at the time of receipt of such cash, such taxes have not
been actually paid or are not then payable, such Person may deduct an
amount (the "Reserved Amount")
---------------
21
equal to the amount reserved in accordance with GAAP as a reasonable
estimate for such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified; provided further, however, that at the time such
-------- ------- -------
taxes are paid, an amount equal to the amount, if any, by which the
Reserved Amount exceeds the amount actually so paid, the amount of such
excess shall constitute "Net Cash Proceeds."
"Note" means an Acquisition Note or a Working Capital Note.
----
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
-------------------
"Notice of Issuance" has the meaning specified in Section 2.03(a).
------------------
"Notice of Swing Line Borrowing" has the meaning specified in Section
------------------------------
2.02(b).
"NPL" means the National Priorities List under CERCLA.
---
"Obligation" means, with respect to any Person, any payment,
----------
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Open Year" has the meaning specified in Section 4.01(z).
---------
"Other Taxes" has the meaning specified in Section 2.12(b).
-----------
"Parent Guarantor" has the meaning specified in the recital of parties
----------------
to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Permitted Encumbrances" has the meaning specified in the Mortgage.
----------------------
"Permitted Issuance" means the sale or issuance by the Parent
------------------
Guarantor or any of its Subsidiaries of any of its equity securities (a) to
Fenway Fund, or equally and ratably to the stockholders of the Parent
Guarantor listed on Schedule 4.01(a) hereto, (b) to issue compensatory
shares of common stock or to grant options, in each case, to management of
the Borrower and its Subsidiaries and (c) upon the exercise of options or
warrants on such common stock.
22
"Permitted Liens" means such of the following as to which no
---------------
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as landlords',
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and
other similar Liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days
unless being contested in good faith and (ii) either individually or when
aggregated with all other Permitted Liens outstanding on any date of
determination, do not materially affect the use or value of the property to
which they relate; (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations; (d) easements, rights of way and other encumbrances
on title to real property that do not render title to the property
encumbered thereby unmarketable or materially adversely affect the use of
such property for its present purposes; (e) deposits or pledges to secure
performance of bids, tenders, contracts (other than for the payment of
borrowed money) or leases in the ordinary course of business of the
Borrower; (f) deposits or pledges to secure statutory obligations or surety
or appeal bonds or to secure indemnity or other similar bonds in the
ordinary course of business of the Borrower; and (g) Liens securing the
balance of PNC (travel expense) debit cards in an aggregate amount of
$250,000.
"Person" means an individual, partnership, corporation (including a
------
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
----
"Pledged Indebtedness" has the meaning specified in the Preliminary
--------------------
Statements to the Security Agreement.
"Pledged Shares" has the meaning specified in the Preliminary
--------------
Statements to the Security Agreement.
"Preferred Stock" means, with respect to any corporation, capital
---------------
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Pro Forma EBITDA" means, for any period, the sum of (i) EBITDA, (ii)
----------------
any adjustments certified by the chief financial officer of the Borrower
that would, in the reasonable determination of the Borrower, satisfy the
requirements of Rule 11-02(a) of Regulation S-X of the Securities Act of
1933, as amended, as if included in a registration statement filed with the
Securities and Exchange Commission and (iii) any other operating expense
reductions reasonably expected to result from any acquisition of stock or
assets of a related business, if such expected reductions are (1) set forth
in reasonable detail in a plan approved by and set forth in resolutions
adopted by the Board of Directors of the Borrower, and (2) limited to
operating expenses specified in such plan (and, if any reductions are set
forth in a range, the lowest amount of such range) that would otherwise
have resulted in the payment of cash within twelve months after the date of
consummation of such transaction, net of any
23
operating expenses (other than extraordinary items, non-recurring or
temporary charges and other similar one-time expenses) reasonably expected
to be incurred to implement such plan (including, without limitation,
personnel, occupancy and transportation expenses), and that are to be paid
in cash during such twelve-month period, certified by the chief financial
officer of the Borrower.
"Pro Rata Share" of any amount means, with respect to any Working
--------------
Capital Lender at any time, the product of such amount times a fraction the
-----
numerator of which is the amount of such Lender's Working Capital
Commitment at such time (or, if the Commitments shall have been terminated,
the Working Capital Facility as in effect immediately prior to such
termination) and the denominator of which is the Working Capital Facility
at such time (or, if the Commitments shall have been terminated, the
Working Capital Facility as in effect immediately prior to such
termination).
"Receivables" means all Receivables referred to in Section 1(c) of the
-----------
Security Agreement.
"Redeemable" means, with respect to any capital stock or other
----------
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a fixed
or determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the holder.
"Refinancing" has the meaning specified in the Preliminary Statements.
-----------
"Register" has the meaning specified in Section 9.07(d).
--------
"Regulation U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Fenway Management Agreement, the non-
-----------------
compete provisions of the Employment/Non-Compete Agreements, the
Intercompany Subordinated Debt Documents and the Subordinated Debt
Documents.
"Required Lenders" means at any time Lenders owed or holding at least
----------------
a majority of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all Letters
of Credit outstanding at such time, (c) the aggregate unused Commitments
under the Acquisition Facilities at such time and (d) the aggregate Unused
Working Capital Commitments at such time. For purposes of this definition,
the aggregate principal amount of Swing Line Advances owing to the Swing
Line Bank and of Letter of Credit Advances owing to the Issuing Bank and
the Available Amount of each Letter of Credit shall be considered to be
owed to the Working Capital Lenders ratably in accordance with their
respective Working Capital Commitments.
"Responsible Officer" means any executive officer of the Borrower or
-------------------
the Parent Guarantor.
"Restricted Acquisitions" means Investments permitted by Section
-----------------------
5.02(f)(xvii), Independent Shoe Distributorship Acquisitions, and
acquisition of assets constituting a line of business.
24
"Retail Leases" has the meaning specified in Section 3.01(k)(x).
-------------
"Rolling Period" means with respect to any fiscal month of any Person,
--------------
the consecutive 12 fiscal month period ending on the last day of such
fiscal month.
"Secured Hedge Agreements" means any Hedge Agreement required or
------------------------
permitted under Article V that is entered into by and between the Borrower
and any Hedge Bank.
"Secured Obligations" has the meaning specified in the Security
-------------------
Agreement.
"Secured Parties" means the Agent, the Lender Parties, the Hedge Banks
---------------
and the other Persons the Obligations owing to which are or are purported
to be secured by the Collateral under the terms of the Collateral
Documents.
"Security Agreement" has the meaning specified in Section
------------------
3.01(k)(vii).
"Seller Subordinated Debt" means Debt permitted under Section
------------------------
5.02(b)(i)(J) and 5.02(b)(ii)(B).
"Senior Leverage Ratio" means the ratio of (a) Funded Debt (other than
---------------------
(i) contingent obligations of the type described in clause (f) or (h) in
the definition of "Debt" and (ii) Subordinated Debt) of the Borrower and
----
its Subsidiaries as of the last day of a Rolling Period to (b) an amount
equal to Consolidated EBITDA of the Parent Guarantor and its Subsidiaries
for the most recently completed Rolling Period for which financial
statements have been provided; provided that such Consolidated EBITDA shall
--------
include the Pro Forma EBITDA of or attributable to any Restricted
Acquisition or Independent Shoe Distribution Acquisition for such Rolling
Period.
"Senior Subordinated Note Indenture" means the Indenture dated as of
----------------------------------
April 24, 1998 among the Borrower, certain of its Subsidiaries signatory
thereto and The Chase Manhattan Bank, as trustee.
"Senior Subordinated Notes" means the Senior Subordinated Notes due
-------------------------
2008 of the Borrower in an aggregate principal amount of $100,000,000
issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan" means a single employer plan, as defined in
--------------------
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
------- --------
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair saleable value of the assets of such Person exceeds the amount that
will be required to pay the probable liabilities of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and
25
does not believe that it will, incur debts or liabilities that will be
beyond such Person's ability to pay such debts and liabilities as they
mature and (d) such Person is not engaged in business or in a transaction,
and is not about to engage in business or in a transaction, for which such
Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the
amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit issued under the
------------------------
Letter of Credit Facility, other than a Trade Letter of Credit.
"Subordinated Debt" means (i) the Senior Subordinated Notes, (ii) the
-----------------
Seller Subordinated Debt and (iii) any other Debt of the Borrower that is
subordinated to the Obligations of the Loan Parties under the Loan
Documents, and that otherwise contains terms and conditions satisfactory to
the Agent.
"Subordinated Debt Documents" means (i) the Senior Subordinated Note
---------------------------
Indenture and (ii) all other agreements, indentures and instruments
delivered in connection with the issuance of the Subordinated Debt.
"Subordination Agreement" means a subordination agreement
-----------------------
substantially in the form of Exhibit P hereto or in such other form as may
be satisfactory to the Agent.
"Subsidiary" of any Person means any corporation, partnership, joint
----------
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantors" means all Subsidiaries of the Parent Guarantor
---------------------
or the Borrower (including, without limitation, to the extent that no
adverse tax consequences would result therefrom, any Foreign Subsidiary)
and each other Subsidiary of either of them that shall be required to
execute and deliver a guaranty pursuant to Section 5.01(m).
"Subsidiary Guaranty" has the meaning specified in Section
-------------------
3.01(k)(xii).
"Surviving Debt" has the meaning specified in Section 3.01(i).
--------------
"Swing Line Advance" means an advance made by (a) the Swing Line Bank
------------------
pursuant to Section 2.01(b) or (b) any Working Capital Lender pursuant to
Section 2.02(b).
"Swing Line Bank" has the meaning specified in the recital of parties
---------------
to this Agreement.
26
"Swing Line Borrowing" means a Borrowing consisting of a Swing Line
--------------------
Advance made by the Swing Line Bank.
"Swing Line Commitment" means, with respect to the Swing Line Bank at
---------------------
any time, the amount set forth opposite the Swing Line Bank's name on
Schedule I hereto under the caption "Swing Line Commitment" or, if the
Swing Line Bank has entered into an Assignment and Acceptance, set forth
for the Swing Line Bank in the Register maintained by the Agent pursuant to
Section 9.07(d) as the Swing Line Bank's "Swing Line Commitment", as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"Swing Line Facility" has the meaning specified in Section 2.01(b).
-------------------
"Taxes" has the meaning specified in Section 2.12(a).
-----
"Termination Date" means the earlier of April 24, 2004 and the date of
----------------
termination in whole of the Acquisition Commitments, the Letter of Credit
Commitments, the Working Capital Commitments and the Swing Line Commitments
pursuant to Section 2.05 or 6.01.
"Trade Letter of Credit" means any Letter of Credit that is issued
----------------------
under the Letter of Credit Facility for the benefit of a supplier of
Inventory to the Borrower or any of its Subsidiaries to effect payment for
such Inventory.
"Transaction Documents" means, collectively, the Loan Documents and
---------------------
the Related Documents.
"Type" refers to the distinction between Advances bearing interest at
----
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Acquisition Commitment" means, with respect to any Acquisition
-----------------------------
Lender at any time prior to the Conversion Date, such Lender's Acquisition
Commitment at such time minus the aggregate principal amount of all
-----
Acquisition Advances made by such Lender and outstanding at such time.
"Unused Working Capital Commitment" means, with respect to any Working
---------------------------------
Capital Lender at any time, (a) such Lender's Working Capital Commitment at
such time minus (b) the sum of (i) the aggregate principal amount of all
-----
Working Capital Advances, Swing Line Advances and Letter of Credit Advances
made by such Lender (in its capacity as a Lender) and outstanding at such
time, plus (ii) such Lender's Pro Rata Share of (A) the aggregate Available
----
Amount of all Letters of Credit outstanding at such time, (B) the aggregate
principal amount of all Letter of Credit Advances made by the Issuing Bank
pursuant to Section 2.03(c) and outstanding at such time and (C) the
aggregate principal amount of all Swing Line Advances made by the Swing
Line Bank pursuant to Section 2.01(b) and outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
------------
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for
27
the election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
------------
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have a liability.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
--------------------
E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section
-----------------------
2.01(a).
"Working Capital Borrowing" means a Borrowing consisting of
-------------------------
simultaneous Working Capital Advances of the same Type made by the Working
Capital Lenders.
"Working Capital Commitment" means, with respect to any Working
--------------------------
Capital Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Working Capital Commitment"
or, if such Lender has entered into one or more Assignment and Acceptances,
set forth for such Lender in the Register maintained by the Agent pursuant
to Section 9.07(d) as such Lender's "Working Capital Commitment", as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"Working Capital Facility" means, at any time, the aggregate amount of
------------------------
the Working Capital Lenders' Working Capital Commitments at such time.
"Working Capital Lender" means any Lender that has a Working Capital
----------------------
Commitment.
"Working Capital Note" means a promissory note of the Borrower payable
--------------------
to the order of any Working Capital Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of the Borrower
to such Lender resulting from the Working Capital Advances made by such
Lender.
"Working Capital Reduction Amount" has the meaning specified in
--------------------------------
Section 2.06(b)(v).
SECTION 1.02. Computation of Time Periods; Other Definitional
-----------------------------------------------
Provisions. In this Agreement and the other Loan Documents, in the computation
----------
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding". References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms to the extent permitted by this Agreement.
SECTION 1.03. Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
----
28
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Working Capital Advances.
------------ ----------------------------
Each Working Capital Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each, a "Working Capital Advance") to
-----------------------
the Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an amount for each such Advance not to
exceed such Lender's Unused Working Capital Commitment at such time. Each
Working Capital Borrowing shall be in an aggregate amount of $500,000 or an
integral multiple of $100,000 in excess thereof (other than a Borrowing the
proceeds of which shall be used solely to repay or prepay in full outstanding
Letter of Credit Advances made by the Issuing Bank) and shall consist of Working
Capital Advances made simultaneously by the Working Capital Lenders ratably
according to their Working Capital Commitments. Within the limits of each
Working Capital Lender's Unused Working Capital Commitment in effect from time
to time, the Borrower may borrow under this Section 2.01(a), prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(a).
(b) The Swing Line Advances. The Borrower may request the Swing
-----------------------
Line Bank to make, and the Swing Line Bank agrees (so long as its obligations
hereunder are not amended or modified without its consent), on the terms and
conditions hereinafter set forth, to make, advances (each a "Swing Line
----------
Advance") to the Borrower from time to time on any Business Day during the
-------
period from the date hereof until the Termination Date (i) in an aggregate
amount not to exceed at any time outstanding $3,000,000 (the "Swing Line
----------
Facility") and (ii) in an amount for each such Swing Line Borrowing not to
--------
exceed the aggregate of the Unused Working Capital Commitments of the Working
Capital Lenders on such Business Day. No Swing Line Advance shall be used for
the purpose of funding the payment of principal of any other Swing Line Advance.
Each Swing Line Borrowing shall be in an amount of $50,000 or an integral
multiple of $25,000 in excess thereof and shall consist of a Base Rate Advance.
Within the limits of the Swing Line Facility and within the limits referred to
in clause (ii) above, the Borrower may borrow under this Section 2.01(b), prepay
pursuant to Section 2.06(a) and reborrow under this Section 2.01(b).
(c) Letters of Credit. The Issuing Bank agrees, on the terms and
-----------------
conditions hereinafter set forth, to issue letters of credit (the "Letters of
----------
Credit") for the account of the Borrower from time to time on any Business Day
------
during the period from the date hereof until 30 days before the Termination Date
in an aggregate Available Amount (i) for all Letters of Credit issued by such
Issuing Bank not to exceed at any time the lesser of (x) the Letter of Credit
Facility at such time and (y) the Issuing Bank's Letter of Credit Commitment at
such time and (ii) in an Available Amount for each such Letter of Credit not to
exceed the Unused Working Capital Commitments of the Working Capital Lenders at
such time. No Letter of Credit shall have an expiration date (including all
rights of the Borrower or the beneficiary to require renewal) later than the
earlier of (1) 10 days before the scheduled Termination Date and (2) (A) in the
case of a Standby Letter of Credit, one year after the date of issuance thereof
and (B) in the case of a Trade Letter of Credit, 120 days after the date of
issuance thereof. Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above, the Borrower may request the issuance
of Letters of Credit under this Section 2.01(c), repay any Letter of Credit
Advances resulting from drawings thereunder pursuant to Section 2.03(c) and
request the issuance of additional Letters of Credit under this Section 2.01(c).
29
(d) The Acquisition Advances. Subject to Section 2.14(b), each
------------------------
Acquisition Lender severally agrees, on the terms and conditions hereinafter set
forth, to make advances (each, an "Acquisition Advance") to the Borrower from
-------------------
time to time on any Business Day during the period from the date hereof until
the Conversion Date in an amount for each such Advance not to exceed such
Lender's Unused Acquisition Commitment at such time. Each Acquisition Borrowing
shall be in an aggregate amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof and shall consist of Acquisition Advances made
simultaneously by the Acquisition Lenders ratably according to their Acquisition
Commitments. Amounts borrowed under this Section 2.01(d) and repaid pursuant to
Section 2.04 or prepaid pursuant to Section 2.06 may not be reborrowed.
SECTION 2.02. Making the Advances. (a) Except as otherwise
-------------------
provided in Section 2.02(b) or Section 2.03, each Borrowing shall be made on
notice, given not later than 1:00 P.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or the first Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances (except in the case of a Borrowing consisting
of Swing Line Advances, which may be made on notice given not later than 1:00
P.M. (New York City time) on the date of the proposed Borrowing), by the
Borrower to the Agent, which shall give to each Appropriate Lender prompt notice
thereof by telex or telecopier. Each such notice of a Borrowing (a "Notice of
---------
Borrowing") shall be in writing, or telex or telecopier, in substantially the
---------
form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing (which shall be a Business Day), (ii) Facility under which such
Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv)
aggregate amount of such Borrowing and (v) in the case of a Borrowing consisting
of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each
Appropriate Lender shall, before 11:00 A.M. (New York City time) on the date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Agent at the Agent's Account, in same day funds, such Lender's ratable
portion of such Borrowing in accordance with the respective Commitments under
the applicable Facility of such Lender and the other Appropriate Lenders. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower by crediting the Borrower's Account; provided, however, that, in
-------- -------
the case of any Working Capital Borrowing, the Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Letter of Credit
Advances made by the Issuing Bank and by any other Working Capital Lender and
outstanding on the date of such Working Capital Borrowing, plus interest accrued
----
and unpaid thereon to and as of such date, available to the Issuing Bank and
such other Working Capital Lenders for repayment of such Letter of Credit
Advances.
(b) Each Swing Line Borrowing shall be made on notice, given not
later than 1:00 P.M. (New York City time) on the date of the proposed Swing Line
Borrowing, by the Borrower to the Swing Line Bank and the Agent. Each such
notice of a Swing Line Borrowing (a "Notice of Swing Line Borrowing") shall be
------------------------------
by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of such Borrowing (which shall be a
Business Day), (ii) amount of such Borrowing and (iii) maturity of such
Borrowing (which maturity shall be no later than the seventh day after the
requested date of such Borrowing). The Swing Line Bank will make the amount set
forth in such Notice of Swing Line Borrowing available to the Agent at the
Agent's Account, in same day funds. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower by crediting the Borrower's
Account. Upon written demand by the Swing Line Bank, with a copy of such demand
to the Agent, each other Working Capital Lender shall purchase from the Swing
Line
30
Bank, and the Swing Line Bank shall sell and assign to each such other Working
Capital Lender, such other Working Capital Lender's Pro Rata Share of such
outstanding Swing Line Advance as of the date of such demand, by making
available for the account of its Applicable Lending Office to the Agent for the
account of the Swing Line Bank, by deposit to the Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Swing Line Advance to be purchased by such Working Capital Lender. The
Borrower hereby agrees to each such sale and assignment. Each Working Capital
Lender agrees to purchase its Pro Rata Share of an outstanding Swing Line
Advance on (i) the Business Day on which demand therefor is made by the Swing
Line Bank; provided that notice of such demand is given not later than 11:00
--------
A.M. (New York City time) on such Business Day or (ii) the first Business Day
next succeeding such demand if notice of such demand is given after such time.
Upon any such assignment by the Swing Line Bank to any other Working Capital
Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and
warrants to such other Working Capital Lender that the Swing Line Bank is the
legal and beneficial owner of such interest being assigned by it, free and clear
of all liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Working Capital Lender shall not
have so made the amount of such Swing Line Advance available to the Agent, such
Working Capital Lender agrees to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
the Swing Line Bank until the date such amount is paid to the Agent, at the
Federal Funds Rate. If such Working Capital Lender shall pay to the Agent such
amount for the account of the Swing Line Bank on any Business Day, such amount
so paid in respect of principal shall constitute a Swing Line Advance made by
such Working Capital Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Swing Line Advance made by the Swing
Line Bank shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder and for the period from the date of such initial
Borrowing to the earlier of (x) three months from such date and (y) the
completion of syndication of the Facilities (as shall be determined by the Agent
in its sole discretion and as specified by the Agent in a written notice to the
Borrower) or for any Borrowing if the aggregate amount of such Borrowing is less
than $1,000,000 or if the obligation of the Appropriate Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or
2.10 and (ii) with respect to Borrowings consisting of Eurodollar Rate Advances,
the Acquisition Advances and the Working Capital Advances may not be outstanding
as part of more than ten separate Borrowings in the aggregate.
(d) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(e) Unless the Agent shall have received written notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Agent such Lender's ratable portion of such Borrowing, the Agent may assume
31
that such Lender has made such portion available to the Agent on the date of
such Borrowing in accordance with subsection (a), (b) or (c) of this Section
2.02, and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the Agent, such
Lender and the Borrower severally agree to pay or repay to the Agent forthwith
on demand such corresponding amount and to pay interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is paid or repaid to the Agent, at (i) in the case of the Borrower, the
interest rate applicable at such time under Section 2.07 to Advances comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall pay to the Agent such corresponding amount, such amount so
paid shall constitute such Lender's Advance as part of such Borrowing for all
purposes hereunder.
(f) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
------------------------------------------------
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
----------------- --------------------
issued upon notice, given not later than 1:00 P.M. (New York City time) on the
fifth Business Day in the case of Standby Letters of Credit and two Business
Days' notice in the case of Trade Letters of Credit prior to the date of the
proposed issuance of such Letter of Credit, by the Borrower to the Issuing Bank,
which shall give to the Agent prompt notice thereof by telex or telecopier.
Each such notice of issuance of a Letter of Credit (a "Notice of Issuance")
------------------
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit, (D) name and address of the beneficiary of such
Letter of Credit, (E) form of such Letter of Credit and (F) whether such Letter
of Credit is to be a Standby Letter of Credit or a Trade Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
the Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If the requested
--------------------------
form of such Letter of Credit is acceptable to the Issuing Bank in its sole
discretion, the Issuing Bank will, upon fulfillment of the applicable conditions
set forth in Article III, make such Letter of Credit available to the Borrower
at its office referred to in Section 9.02 or as otherwise agreed with the
Borrower in connection with such issuance. In the event and to the extent that
the provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to
------------------------
the Agent on the first Business Day of each week a written report summarizing
the issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (B) to
each Working Capital Lender on the first Business Day of each fiscal quarter
ended January 31, April 30, July 31 and October 31, a written report summarizing
the issuance and expiration dates of Letters of Credit issued during the
preceding fiscal quarter and drawings during such fiscal quarter under all
Letters of Credit and (C) to the Agent and each Working Capital Lender on the
first Business Day of each calendar quarter a written report setting forth the
average daily aggregate Available Amount during the preceding calendar quarter
of all Letters of Credit.
32
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
-------------------------
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. In the event of any
drawing under a Letter of Credit, the Issuing Bank shall promptly notify the
Agent, and the Agent shall promptly notify each Working Capital Lender and each
Working Capital Lender shall purchase from the Issuing Bank, and the Issuing
Bank shall sell and assign to each such Working Capital Lender, such Working
Capital Lender's Pro Rata Share of such outstanding Letter of Credit Advance as
of the date of such purchase, by making available for the account of its
Applicable Lending Office to the Agent for the account of the Issuing Bank, by
deposit to the Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Working Capital Lender. Promptly after receipt thereof,
the Agent shall transfer such funds to the Issuing Bank. The Borrower hereby
agrees to each such sale and assignment. Each Working Capital Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which notice of the drawing under the related Letter of
Credit is given by the Issuing Bank; provided such notice is given not later
--------
than 1:00 P.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if such notice is given after such
time. Upon any such assignment by the Issuing Bank to any other Working Capital
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Working Capital Lender that the Issuing Bank is the
legal and beneficial owner of such interest being assigned by it, free and clear
of all liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Working Capital Lender shall
not have so made the amount of such Letter of Credit Advance available to the
Agent, such Working Capital Lender agrees to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Issuing Bank until the date such amount is paid to the Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Working Capital Lender shall pay to the Agent such amount
for the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Working Capital Lender on such Business Day for purposes of this Agreement, and
the outstanding principal amount of the Letter of Credit Advance made by the
Issuing Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
-----------------------------------------
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Working Capital Advances.
--------------------- ------------------------
The Borrower shall repay to the Agent for the ratable account of the Working
Capital Lenders on the Termination Date the aggregate outstanding principal
amount of the Working Capital Advances then outstanding.
(b) Swing Line Advances. The Borrower shall repay to the Agent, for
-------------------
the account of the Swing Line Bank and each other Working Capital Lender which
has made a Swing Line Advance to it, the outstanding principal amount of each
Swing Line Advance made by each of them on the earlier of the maturity date
specified in the applicable Notice of Swing Line Borrowing (which maturity shall
be no later than the seventh day after the requested date of such Borrowing) and
the Termination Date.
33
(c) Letter of Credit Advances. (i) The Borrower shall repay to the
-------------------------
Agent for the account of the Issuing Bank and each other Working Capital Lender
that has made a Letter of Credit Advance to it the outstanding principal amount
of each Letter of Credit Advance made by each of them on the earlier of the
Termination Date and on demand.
(ii) The Obligations of the Borrower under this Agreement, any Letter
of Credit Agreement and any other agreement or instrument relating to any Letter
of Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including, without
limitation, the following circumstances (subject, however, to the provisions of
Section 9.09);
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
---------------------
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, setoff, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the L/C Related Documents; or
(G) any other similar circumstance or happening whatsoever,
including, without limitation, any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or a
guarantor.
(d) Acquisition Advances. The Borrower shall repay to the Agent for
--------------------
the ratable account of the Acquisition Lenders the aggregate outstanding
principal amount of the Acquisition Advances on the following dates in the
amounts indicated, determined as a percentage of the aggregate amount of
Acquisition Advances outstanding on the Conversion Date (after giving effect to
any prepayments required by Section
34
2.06(b)(i) or (ii) and which amount shall be reduced as a result of the
application of further prepayments in accordance with the order of priority set
forth in the applicable paragraph of Section 2.06):
Date Amount
---- ------
July 31, 2001 7.5%
October 31, 2001 7.5%
January 31, 2002 7.5%
April 30, 2002 7.5%
July 31, 2002 7.5%
October 31, 2002 7.5%
January 31, 2003 7.5%
April 30, 2003 7.5%
July 31, 2003 10.0%
October 31, 2003 10.0%
January 31, 2004 10.0%
April 30, 2004 10.0%
provided, however, that the final principal installment of the Acquisition
-------- -------
Facility shall in any event be in an amount equal to the aggregate principal
amount of the Acquisition Advances then outstanding.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
-------------------------------------------
Optional. The Borrower may, upon at least five Business Days' notice to the
--------
Agent, terminate in whole or reduce in part the unused portions of the Swing
Line Commitment, the Letter of Credit Commitment, the Unused Working Capital
Commitments and the Unused Acquisition Commitments; provided, however, that each
-------- -------
partial reduction of a Facility (i) shall be in an aggregate amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof and (ii) shall
be made ratably among the Appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) Mandatory. (i) The Working Capital Facility shall be
---------
automatically and permanently reduced on the date on which prepayment thereof is
required to be made pursuant to Section 2.06(b)(i) or (ii) by an amount equal to
the Working Capital Reduction Amount; provided that each such reduction of the
--------
Working Capital Facility shall be made ratably among the Working Capital Lenders
in accordance with their Working Capital Commitments.
(ii) The Letter of Credit Facility shall be automatically and
permanently reduced from time to time on the date of each reduction in the
Working Capital Facility by the amount, if any, by which the amount of the
Letter of Credit Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
(iii) The Swing Line Facility shall be automatically and permanently
reduced from time to time on the date of each reduction in the Working Capital
Facility by the amount, if any, by which the
35
amount of the Swing Line Facility exceeds the Working Capital Facility after
giving effect to such reduction of the Working Capital Facility.
(iv) Prior to the Conversion Date, the Acquisition Facility shall be
automatically and permanently reduced on the date on which prepayment thereof is
required to be made pursuant to Section 2.06(b)(ii) by an amount equal to the
Acquisition Reduction Amount; provided that each such reduction of the
--------
Acquisition Facility shall be made ratably among the Acquisition Lenders in
accordance with their Acquisition Commitments. From and after the Conversion
Date, the Acquisition Commitments of the Acquisition Lenders shall be
automatically and permanently reduced, on a pro rata basis, by an amount equal
to the amount by which the aggregate Acquisition Facility Commitments
immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Acquisition Advances then outstanding.
SECTION 2.06. Prepayments. (a) Optional. Except prior to the
----------- --------
Conversion Date with respect to Acquisition Advances, the Borrower may, upon at
least one Business Day's notice in the case of Base Rate Advances (except in the
case of Swing Line Advances, which shall be same day notice) and three Business
Days' notice in the case of Eurodollar Rate Advances, in each case to the Agent
(received not later than 1:00 P.M. (New York City time)) stating the proposed
date (which shall be a Business Day) and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part of the
same Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid unless
such prepayment is with respect to a Swing Line Advance or a Working Capital
Advance that is a Base Rate Advance; provided, however, that (x) each partial
-------- -------
prepayment (other than a prepayment of Swing Line Advances) shall be in an
aggregate principal amount of $500,000 or an integral multiple of $100,000 in
excess thereof (or, with respect to Swing Line Advances, shall be in an
aggregate principal amount of $50,000 or an integral multiple of $25,000 in
excess thereof) and (y) if any prepayment of a Eurodollar Rate Advance shall be
made other than on the last day of an Interest Period therefor, the Borrower
shall also pay any amounts owing pursuant to Section 9.04(c). Each such
prepayment of any Advances, shall be applied as follows:
(i) Prior to the Conversion Date, at the option of the Borrower to
prepay the Acquisition Facility as set forth in Section 2.06(b)(vi) or to
prepay the Working Capital Facility as set forth in Section 2.06(b)(v).
(ii) From and after the Conversion Date:
first, permanently to reduce the Acquisition Facility ratably to
-----
the principal installments thereof, and
second, to the extent that the Acquisition Facility has been
------
fully repaid and permanently reduced in full, to prepay the Working Capital
Facility as set forth in Section 2.06(b)(v).
(b) Mandatory. (i) From and after the Conversion Date, the
---------
Borrower shall, no later than the 30th day following the date on which it
delivers the financial statements referred to in Section 5.03(d) (but in any
event within 100 days after the end of each Fiscal Year), prepay an aggregate
principal amount of the
36
Advances comprising part of the same Borrowings equal to 50% of the amount
of Excess Cash Flow for such Fiscal Year. Each such prepayment of any Advances
shall be applied as follows:
first, permanently to reduce the Acquisition Facility, ratably to the
-----
principal installments thereof, and
second, to the extent that the Acquisition Facility has been fully
------
repaid and permanently reduced in full, permanently to reduce the Working
Capital Facility as set forth in Section 2.06(b)(v).
(ii) The Borrower shall, on the date of receipt of the Net Cash
Proceeds by the Parent Guarantor or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of the Parent Guarantor or
any of its Subsidiaries (other than any sale, lease, transfer or other
disposition of assets to the extent permitted pursuant to clause (i), (ii) or
(iii) of Section 5.02(e)), (B) the incurrence or issuance by the Parent
Guarantor or any of its Subsidiaries of any Debt (other than Debt incurred or
issued to the extent permitted pursuant to Section 5.02(b)), (C) the sale or
issuance by the Parent Guarantor or any of its Subsidiaries of any capital stock
(other than, so long as no Default has occurred and is continuing or would
result therefrom, and the Agent shall have received from the Borrower and the
Parent Guarantor a certificate to such effect, the proceeds of any such sale or
issuance from a Permitted Issuance) or other ownership or profit interest, any
securities convertible into or exchangeable for capital stock or other ownership
or profit interest or any warrants, rights or options to acquire capital stock
or other ownership or profit interest, or (D) any Extraordinary Receipt received
by or paid to or for the account of the Parent Guarantor or any of its
Subsidiaries and not otherwise included in clause (A), (B) or (C) above, prepay
an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to the amount of such Net Cash Proceeds. Prior to the
Conversion Date, each such prepayment shall be applied as follows:
first, permanently to reduce the Acquisition Facility as set forth in
-----
Section 2.06(b)(vi), and
second, to the extent that the Acquisition Facility has been fully
------
repaid and permanently reduced in full, permanently to reduce the Working
Capital Facility as set forth in Section 2.06(b)(v).
From and after the Conversion Date, each such prepayment shall be applied as
follows:
first, to permanently to reduce the Acquisition Facility, ratably to
-----
the principal installments thereof, and
second, to the extent the Acquisition Facility has been fully repaid
------
and permanently reduced in full, permanently to reduce the Working Capital
Facility as set forth in Section 2.06(b)(v).
(iii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Working Capital Advances comprising part of the same
Borrowings, the Letter of Credit Advances, and the Swing Line Advances equal to
the amount by which (A) the sum of the aggregate principal amount of (x) the
Working Capital Advances, (y) the Letter of Credit Advances and (z) the Swing
Line Advances then outstanding plus the aggregate Available Amount of all
----
Letters of Credit then outstanding exceeds (B) the lesser of the Working Capital
Facility and the Loan Value of Eligible Collateral on such Business Day (as
determined based on the most recent Borrowing Base Certificate delivered to the
Lender Parties hereunder).
37
(iv) The Borrower shall, on each Business Day, pay to the Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such L/C Cash Collateral Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(v) Prepayments of the Working Capital Facility made pursuant to
Section 2.06(b)(i), (ii) or (iii) shall be first applied to prepay Letter of
-----
Credit Advances then outstanding until such Letter of Credit Advances are paid
in full, second applied to prepay Swing Line Advances then outstanding until
------
such Swing Line Advances are paid in full, third applied to prepay Working
-----
Capital Advances then outstanding comprising part of the same Borrowings until
such Working Capital Advances are paid in full, and fourth deposited in the L/C
------
Cash Collateral Account to cash collateralize 105% of the Available Amount of
the Letters of Credit then outstanding. In the case of prepayments of the
Working Capital Facility required pursuant to Section 2.06(b)(i) or (ii), the
amount remaining (if any) after the prepayment in full of the Working Capital
Advances then outstanding and the cash collateralization of the aggregate
Available Amount of Letters of Credit then outstanding (the sum of such
prepayment amounts, cash collateralization amounts and the amount remaining (if
any) not required to prepay the Working Capital Advances being referred to
herein as the "Working Capital Reduction Amount") may be retained by the
--------------------------------
Borrower and the Working Capital Facility shall be permanently reduced as set
forth in Section 2.05(b)(i). Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the Issuing Bank or the Working Capital Lenders, as
applicable.
(vi) Prior to the Conversion Date, prepayments of the Acquisition
Facility pursuant to Section 2.06(b)(ii) shall be applied to prepay Acquisition
Advances then outstanding comprising part of the same Borrowings until such
Acquisition Advances are paid in full and the amount remaining (if any) after
the prepayment in full of the Acquisition Advances then outstanding (the sum of
such prepayment amounts and the amount remaining (if any) not required to prepay
the Acquisition Advances being referred to herein as the "Acquisition Reduction
---------------------
Amount") shall be applied in accordance with Section 2.06(b)(v). In addition,
------
the Acquisition Facility shall be permanently reduced as set forth in Section
2.05(b)(iv).
(vii) All prepayments under this Section 2.06(b), other than
prepayments of Swing Line Advances and Working Capital Advances that are Base
Rate Advances, shall be made together with accrued interest to the date of such
prepayment on the principal amount prepaid, together with any amounts owing
pursuant to Section 9.04(c).
(viii) Anything contained in this Section 2.06(b) to the contrary
notwithstanding, (A) if, following the occurrence of any "Asset Disposition" (as
such term is defined in the Discount Note Indenture and the Senior Subordinated
Note Indenture) by any Loan Party or any of its Subsidiaries, the Borrower shall
be required to commit by a particular date (a "Commitment Date") to apply or
---------------
cause its Subsidiaries to apply an amount equal to any of the "Net Proceeds" (as
such term is defined in the Discount Note Indenture and the Senior Subordinated
Note Indenture) thereof in a particular manner, or to apply by a particular date
(an "Application Date") an amount equal to such Net Available Cash at least 60
----------------
days before the applicable Commitment Date or Application Date, as the case may
be, or (B) if the Borrower at any other time shall have failed to apply or
commit or cause to be applied an amount equal to any such Net Available Cash,
and, within 60 days thereafter assuming no further application or commitment of
an amount equal to such Net Available Cash the Borrower would otherwise be
required to make an "Excess Proceeds Offer" (as such term is defined
38
in the Discount Note Indenture and the Senior Subordinated Note Indenture) in
respect thereof, then in either such case the Borrower shall immediately apply
or cause to be applied an amount equal to such Net Available Cash to the payment
of Advances in the manner set forth in Section 2.06(b)(ii) in such amounts as
shall excuse the Borrower from making any such Excess Proceeds Offer.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
-------- ------------------
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
------------------
Base Rate Advance, a rate per annum equal at all times to the sum of (A)
the Base Rate in effect from time to time plus (B) the Applicable Margin in
----
effect from time to time, payable in arrears quarterly on each April 30,
July 31, October 31 and January 31 during such periods, on the date of any
prepayment thereof to the extent required under Section 2.06 and on the
Termination Date, commencing April 30, 1998.
(ii) Eurodollar Rate Advances. During such periods as such Advance
------------------------
is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (A) the Eurodollar Rate
for such Interest Period for such Advance plus (B) the Applicable Margin,
----
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of
such Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
----------------
continuance of any Event of Default, the Agent may, and upon the request of the
Required Lenders shall, require the Borrower to pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in Section 2.07(a)(i) or (ii) and on demand, at a rate per
annum equal at all times to 2% per annum above the rate of interest otherwise
applicable with respect to such amount and (ii) to the fullest extent permitted
by law, the amount of any interest, fee or other amount payable under the Loan
Documents that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum required to be paid, in the case of interest, on the Type
of Advance on which such interest has accrued pursuant to Section 2.07(a)(i) or
(ii), and, in all other cases, on Base Rate Advances pursuant to Section
2.07(a)(i); provided, however, that, following acceleration of the Advances,
-------- -------
interest shall accrue and be payable at the rate required by this Section
2.07(b), irrespective of whether requested by the Agent or the Required Lenders.
In addition, following a final judgment with respect to any Obligation of the
Loan Parties under the Loan Documents, interest shall accrue at the higher of
the statutory judgment rate or the rate specified in the preceding sentence,
payable on demand.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
-----------------------
Borrowing pursuant to Section 2.02(a), the Agent shall give notice to the
Borrower and each Appropriate Lender of the applicable interest rate determined
by the Agent for purposes of Section 2.06(a)(i) or (ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
---- --------------
the Agent for the account of the Lenders a commitment fee, from the date hereof
in the case of each Initial Lender and from the
39
effective date specified in the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender until the Termination Date,
payable in arrears quarterly on each April 30, July 31, October 31, and January
31, commencing April 30, 1998, and on the Termination Date, at the rate of
0.4375% per annum on the average daily Unused Acquisition Commitment (prior to
the Conversion Date) of such Lender and on the average daily Unused Working
Capital Commitment of such Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
--------------------------
Agent for the account of each Working Capital Lender a commission, payable in
arrears quarterly on each April 30, July 31, October 31 and January 31,
commencing April 30, 1998, and on the Termination Date, on such Lender's Pro
Rata Share of the average daily aggregate Available Amount during such quarter
of all Letters of Credit outstanding from time to time at the Applicable Margin
for Eurodollar Rate Advances under the Working Capital Facility.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and the Issuing Bank shall agree.
(c) Agent's Fees. The Borrower shall pay to the Agent, for its own
------------
account, such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower
---------------------- --------
may on any Business Day, upon notice given to the Agent not later than 1:00 P.M.
(New York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Section 2.10, Convert all or any
portion of the Advances of one Type comprising the same Borrowing into Advances
of the other Type; provided, however, that (w) if any Conversion of Eurodollar
-------- -------
Rate Advances into Base Rate Advances is made other than on the last day of an
Interest Period for such Eurodollar Rate Advances, the Borrower shall also pay
any amounts owing pursuant to Section 9.04(c), (x) any Conversion of Base Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than the
minimum amount specified in Section 2.02(c), (y) no Conversion of any Advances
shall result in more separate Borrowings than permitted under Section 2.02(c)
and (z) each Conversion of Advances comprising part of the same Borrowing under
any Facility shall be made ratably among the Appropriate Lenders in accordance
with their Commitments under such Facility. Each such notice of Conversion
shall, within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period for
such Advances. Each notice of Conversion shall be irrevocable and binding on
the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
---------
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent shall forthwith so notify the Borrower and the Appropriate Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
40
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
--------------------
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances, then the
Borrower shall from time to time, upon demand by such Lender Party (with a copy
of such demand to the Agent), pay to the Agent for the account of such Lender
Party additional amounts sufficient to compensate such Lender Party for such
increased cost; provided, however, that a Lender Party claiming additional
-------- -------
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A certificate as to
computations of the amount of such increased cost, submitted to the Borrower by
such Lender Party, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue or participate in Letters of
Credit hereunder and other commitments of such type or the issuance or
maintenance of or participation in the Letters of Credit (or similar contingent
obligations), then, upon demand by such Lender Party (with a copy of such demand
to the Agent), the Borrower shall pay to the Agent for the account of such
Lender Party, from time to time as specified by such Lender Party, additional
amounts sufficient to compensate such Lender Party in the light of such
circumstances, to the extent that such Lender Party reasonably determines such
increase in capital to be allocable to the existence of such Lender Party's
commitment to lend or to issue or to participate in Letters of Credit hereunder
or to the issuance or maintenance of or participation in any Letters of Credit.
A certificate as to computations of such amounts submitted to the Borrower by
such Lender Party shall be conclusive and binding for all purposes, absent
manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least 50% of the then aggregate unpaid principal
amount thereof notify the Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, then the Agent shall forthwith so notify the Borrower and the
Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance under any
Facility will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no longer
exist.
41
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Agent, (i) such Lender's share of each Eurodollar Rate Advance under
each Facility under which such Lender has a Commitment will automatically, upon
such demand, Convert into a Base Rate Advance and (ii) the obligation of such
Lender to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided, however, that before making any such demand, such Lender agrees to use
-------- -------
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would allow such Lender or its Eurodollar Lending Office
to continue to perform its obligations to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
-------------------------
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or setoff, not later than 1:00 P.M. (New York City time) on the day
when due in U.S. dollars to the Agent at the Agent's Account in same day funds,
with payments being received by the Agent after such time being deemed to have
been received on the next succeeding Business Day. The Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lender Parties and (ii) if such payment by the
Borrower is in respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(e), from and after
the effective date of such Assignment and Acceptance, the Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender Party assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Agent receives funds for application to the Obligations
under the Loan Documents under circumstances for which the Loan Documents do not
specify the Advances or the Facility to which, or the manner in which, such
funds are to be applied, the Agent may, but shall not be obligated to, elect to
distribute such funds to each Lender Party ratably in accordance with such
Lender Party's proportionate share of the principal amount of all outstanding
Advances and the Available Amount of all Letters of Credit then outstanding, in
repayment or prepayment of such of the outstanding Advances or other Obligations
owed to such Lender Party, and for application to such principal installments,
as the Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
42
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Agent on the basis of a year of 360 days (other
than computations of interest on Base Rate Advances, which shall be made on the
basis of a year of 365 days), in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. Each determination by the
Agent of an interest rate, fee or commission hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that if such extension would cause payment of
-------- -------
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to any Lender Party hereunder that
the Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender Party on such due date an amount equal to the amount then due such Lender
Party. If and to the extent that the Borrower shall not have so made such
payment in full to the Agent, each such Lender Party shall repay to the Agent
forthwith on demand such amount distributed to such Lender Party together with
interest thereon, for each day from the date such amount is distributed to such
Lender Party until the date such Lender Party repays such amount to the Agent,
at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
-----
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and the Agent,
---------
taxes that are imposed on its overall net income by the United States and taxes
that are imposed on its overall net income (and franchise taxes in lieu thereof)
by the state or foreign jurisdiction under the laws of which such Lender Party
or the Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each Lender Party, taxes that are imposed on its
overall net income (and franchise taxes in lieu thereof) by the state or foreign
jurisdiction of such Lender Party's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
-----
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender Party or the Agent,
(i) the sum payable by the Borrower shall be increased as may be necessary so
that after the Borrower and the Agent shall have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make all such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other governmental
authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes
43
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or the Notes (hereinafter referred to
as "Other Taxes").
-----------
(c) The Borrower shall indemnify each Lender Party and the Agent for
and hold each of them harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.12, paid by such Lender Party or the Agent
(as the case may be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender Party or
the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 9.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e) of this
Section 2.12, the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long thereafter as such Lender Party remains lawfully
able to do so), provide the Agent and the Borrower with two (2) duly completed
copies of Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender Party is exempt from or is entitled to a reduced rate of United States
withholding tax on payments under this Agreement or the Notes. To the extent
that any such form becomes obsolete with respect to any Lender Party, such
Lender Party shall, upon the reasonable written request of the Borrower to such
Lender Party and the Agent (but only if such Lender Party is lawfully able to do
so) provide two (2) copies of either an updated or successor form to the
Borrower and the Agent. If the forms provided by a Lender Party at the time
such Lender Party first becomes a party to this Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender Party
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that, if at the date of
-------- -------
the Assignment and Acceptance pursuant to which a Lender Party becomes a party
to this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) of this Section 2.12 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term
"Taxes" shall include (in addition to withholding taxes that may be imposed in
the future or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to the Lender Party assignee on
such date. If any form or document referred to in this subsection (e) requires
the disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form 1001 or 4224, that the Lender Party reasonably considers to be
confidential, the Lender Party shall give
44
notice thereof to the Borrower and shall not be obligated to include in such
form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form described in subsection (e) of
this Section 2.12 (other than if the Borrower has failed to timely request with
reasonable notice any appropriate renewal, successor or any other form or if
such form otherwise is not required under subsection (e) of this Section 2.12),
such Lender Party shall not be entitled to indemnification under subsection (a)
or (c) of this Section 2.12 with respect to Taxes imposed by the United States;
provided, however, that should a Lender Party become subject to Taxes because of
-------- -------
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Lender Party shall reasonably request to assist such Lender Party
to recover such Taxes.
(g) If the Agent or any Lender Party, in its sole opinion, determines
that it has finally and irrevocably received or been granted a refund in respect
of any Taxes or Other Taxes as to which indemnification has been paid by the
Borrower pursuant to subsection (a) or (c) of this Section 2.12, it shall
promptly remit such refund to the Borrower, net of all out-of-pocket expenses of
the Agent or such Lender Party; provided, however, that the Borrower, upon the
-------- -------
request of the Agent or such Lender Party, agrees promptly to return such refund
to such party in the event such party is required to repay such refund to the
relevant taxing authority. The Agent or such Lender Party shall provide the
Borrower with a copy of any notice or assessment from the relevant taxing
authority (deleting any confidential information contained therein) requiring
payment of such refund. At the request and expense of the Borrower, the Agent
or any Lender Party, as the case may be, shall use commercially reasonably
efforts to seek a refund of any Taxes or Other Taxes as to which indemnification
has been paid by the Borrower pursuant to subsection (a) or (c) of this Section
2.12. Nothing contained herein shall impose an obligation on the Agent or any
Lender Party to disclose to any party any information regarding tax affairs and
computations.
(h) Any Lender Party claiming any additional amounts payable pursuant
to this Section 2.12 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
------------------------
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise) (a) on account of Obligations due
and payable to such Lender Party hereunder or under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder or
under the Notes at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender Party at
such time to (ii) the aggregate amount of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time) of
payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
45
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
-------- -------
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing an interest
or participating interest from another Lender Party pursuant to this Section
2.13 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of setoff) with respect to such interest or
participating interest as fully as if such Lender Party were the direct creditor
of the Borrower in the amount of such interest or participating interest.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances and the
---------------
issuances of Letters of Credit shall be available (and the Borrower agrees that
it shall use such proceeds and Letters of Credit) solely as follows: (a) from
the Working Capital Advances to refinance certain existing indebtedness of the
Borrower, to pay transaction fees and expenses in connection therewith and the
other transactions contemplated hereby, and to provide working capital for the
Borrower and its Subsidiaries and for other general corporate purposes permitted
under this Agreement; and (b) from the Acquisition Advances on the terms
provided by Section 5.02(f)(xi), 5.02(f)(xvi) or 5.02(f)(xvii), as applicable.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in
----------------
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower
agrees that, upon notice by any Lender Party to the Borrower (with a copy of
such notice to the Agent) to the effect that a Note is required or appropriate
in order for such Lender to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender
Party, the Borrower shall promptly execute and deliver to such Lender an
Acquisition Note and a Working Capital Note, as applicable, payable to the order
of such Lender Party in a principal amount equal to the Acquisition Commitment
or Revolving Credit Commitment, respectively, of such Lender Party. All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.
(b) The Register maintained by the Agent pursuant to Section 9.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assignment and Acceptance delivered to and accepted by it, (iii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender Party hereunder, and (iv) the amount of any sum
received by the Agent from the Borrower hereunder and each Lender Party's share
thereof.
46
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) of this Section 2.15, and by each Lender Party in its account
or accounts pursuant to subsection (a) of this Section 2.15, shall be prima
-----
facie evidence of the amount of principal and interest due and payable or to
-----
become due and payable from the Borrower to, in the case of the Register, each
Lender Party and, in the case of such account or accounts, such Lender Party,
under this Agreement, absent manifest error; provided, however, that the failure
-------- -------
of the Agent or such Lender Party to make an entry, or any finding that an entry
is incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.
(d) References herein to the Notes shall mean and be references to
the Working Capital Notes and the Acquisition Notes, unless otherwise
specifically indicated, in each case to the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of Credit.
---------------------------------------------------
The obligation of each Lender to make an Advance on the occasion of the Initial
Extension of Credit hereunder is subject to the satisfaction of the following
conditions precedent before or concurrently with the Initial Extension of
Credit:
(a) The Lender Parties shall be reasonably satisfied (i) that the
amount of committed equity and debt financing shall be sufficient to meet
the financing requirements of the Refinancing and the other transactions
contemplated thereby, (ii) with the terms and conditions of the Related
Documents and (iii) that the assets and earnings of the Loan Parties are
sufficient to support the Obligations of the Loan Parties under the Loan
Documents and the timely amortization of all Debt and other Obligations of
the Loan Parties.
(b) The Lender Parties shall be reasonably satisfied with the
corporate and legal structure and capitalization of the Loan Parties, both
before and after giving effect to the Refinancing, including, without
limitation, the terms and conditions of the charter, bylaws and each class
of capital stock of each of the Loan Parties and of each agreement or
instrument relating to such structure or capitalization.
(c) The Related Documents to be entered into in connection with the
Refinancing shall have been executed and delivered and shall be in full
force and effect, and before giving effect to the Refinancing and the other
transactions contemplated thereby, there shall have occurred no Material
Adverse Change since January 31, 1998.
(d) The Borrower shall have received at least $100,000,000 in gross
cash proceeds from the sale of the Senior Subordinated Notes and the Parent
Guarantor shall have received at least $25,000,000 in gross cash proceeds
from the sale of the Discount Notes.
47
(e) The Series A Preferred Stock has been redeemed for an aggregate
redemption price not in excess of $17,800,000.
(f) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the Refinancing or the
transactions contemplated hereby or thereby.
(g) All material governmental and third party consents and approvals
necessary in connection with the Refinancing and the other transactions
contemplated by the Transaction Documents shall have been obtained (without
the imposition of any conditions that are not reasonably acceptable to the
Lender Parties) and shall remain in effect, all applicable waiting periods
in connection with the Refinancing and the other transactions contemplated
by the Transaction Documents shall have expired without any action having
been taken by any competent authority, and no law or regulation shall be
applicable in the reasonable judgment of the Lender Parties, in each case
that restrains, prevents or imposes materially adverse conditions upon the
Refinancing and the other transactions contemplated by the Transaction
Documents or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties
now owned or hereafter acquired by any of them.
(h) [intentionally omitted]
(i) Each of the senior secured credit facilities and the subordinated
notes referred to in Schedule 4.01(ff) and the other Existing Debt, other
than the Debt identified on Schedule 3.01(i) (the "Surviving Debt"), has
--------------
been prepaid, redeemed or defeased in full or otherwise satisfied and
extinguished and all such Surviving Debt shall be on terms and conditions
satisfactory to the Lender Parties.
(j) All accrued fees and expenses of the Agent and the Lender Parties
(including, without limitation, the accrued fees and expenses of counsel to
the Agent and of local counsel to the Lender Parties) shall have been paid.
(k) The Agent shall have received on or before the date of the
Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance reasonably satisfactory to the
Agent (unless otherwise specified) and, except for the Notes, in sufficient
copies for each Lender Party:
(i) The Notes payable to the order of the Lenders to the
extent required by Section 2.15.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving the
Refinancing, this Agreement, the Notes, each other Transaction
Document to which it is or is to be a party, and of all documents
evidencing other
48
necessary corporate action and governmental approvals, if any, with respect
to the Refinancing, this Agreement, the Notes, each other Transaction
Document.
(iii) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Loan Party, dated reasonably near the
date of the Initial Extension of Credit, in each case listing the charter
of such Person and each amendment thereto on file in his office and
certifying that (A) such charter is a true and correct copy thereof, (B)
such amendments are the only amendments to such charter on file in his
office, (C) such Person has paid all franchise taxes to the date of such
certificate and (D) such Person is duly incorporated and in good standing
under the laws of the jurisdiction of its incorporation.
(iv) A copy of a certificate of the Secretary of State of the
States of Maine, Pennsylvania and New York, as requested by the Agent,
dated reasonably near the date of the Initial Extension of Credit, stating
that the Borrower and each other Loan Party is duly qualified and in good
standing as a foreign corporation in such States and has filed all annual
reports required to be filed to the date of such certificate.
(v) A certificate of each of the Borrower, the Parent
Guarantor and each other Loan Party, signed on behalf of such Person by its
President, any Executive Vice President or any Vice President and its
Secretary, dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and as of the date of
the Initial Extension of Credit), certifying as to (A) the absence of any
amendments to the charter of such Person since the date of the Secretary of
State's certificate referred to in Section 3.01(k)(iii), (B) a true and
correct copy of the bylaws of such Person as in effect on the date on which
the resolutions referred to in Section 3.01(k)(ii) were adopted and on the
date of the Initial Extension of Credit, (C) the due incorporation and good
standing or valid existence of such Person as a corporation organized under
the laws of the jurisdiction of its incorporation and the absence of any
proceeding for the dissolution or liquidation of such Person, (D) the
completeness and accuracy of the representations and warranties contained
in the Loan Documents as though made on and as of the date of the Initial
Extension of Credit and (E) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit, that
constitutes a Default.
(vi) A certificate of the Secretary of each of the Borrower,
the Parent Guarantor and each other Loan Party certifying the names and
true signatures of the officers of such Persons authorized to sign this
Agreement, the Notes, each other Transaction Document to which it is or is
to be a party and the other documents to be delivered hereunder and
thereunder.
(vii) A security agreement in substantially the form of Exhibit
D hereto (together with each other security agreement and security
agreement supplement delivered pursuant to Section 5.01(m), in each case as
amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms, and as permitted by this Agreement,
the "Security Agreement"), duly executed by each Loan Party, together with:
------------------
49
(A) certificates representing the Pledged Shares
accompanied by undated stock powers executed in blank, and
instruments evidencing the Pledged Indebtedness indorsed in
blank,
(B) executed copies of proper financing statements, to be
filed under the Uniform Commercial Code of all jurisdictions that
the Agent may deem necessary or desirable in order to perfect and
protect the Liens created under the Collateral Documents,
covering the Collateral described in the Security Agreement,
(C) evidence of the completion of all other recordings
and filings of or with respect to the Security Agreement that the
Agent may deem reasonably necessary or desirable in order to
perfect and protect the Liens created thereby,
(D) evidence of the insurance required by the terms of
the Security Agreement,
(E) copies of the Assigned Agreements referred to in the
Security Agreement, together with a consent to such assignment,
in substantially the form of Exhibit C to the Security Agreement,
duly executed by each party to such Assigned Agreements other
than the Loan Parties,
(F) executed termination statements (Form UCC-3 or a
comparable form), in proper form to be duly filed on the date of
the Initial Extension of Credit under the Uniform Commercial Code
of all jurisdictions that the Agent may deem reasonably necessary
or desirable in order to terminate or amend existing Liens on the
Collateral described in the Security Agreement, and
(G) evidence that all other action that the Agent may
deem reasonably necessary or desirable in order to perfect and
protect the first priority Liens and security interests created
under the Security Agreement have been taken, including, without
limitation, delivery of Blocked Account Letters in form and
substance satisfactory to the Agent.
(viii) Mortgages in substantially the form of Exhibit E hereto
and covering the properties listed on Schedule 4.01(gg) (together with each
other mortgage delivered pursuant to Section 5.01(m), in each case as
amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with their terms, and as permitted by this Agreement,
the "Mortgages"), duly executed by the appropriate Loan Party, together
----------
with such title insurance policies, surveys, insurance certificates and
other documents as the Agent may reasonably request.
(ix) A true and complete copy of the lease for the Lewiston,
Maine facility ("Lewiston Lease") and such other leases as the Agent may
--------------
reasonably request and any and all ancillary documents pertaining thereto
(including, but not limited to, all amendments,
50
consents for alterations and documents recording variations and evidence of
commencement dates and expiration dates).
(x) A true and complete list of any and all retail store
leases ("Retail Leases") under which any Loan Party or any of its
-------------
Subsidiaries is the lessee in substantially the same form as shown on
Schedule 4.01(hh) hereto.
(xi) The Subordinated Debt Documents relating to the Senior
Subordinated Notes, including, without limitation, the Senior Subordinated
Note Indenture and the Discount Note Documents relating to the Discount
Notes, including, without limitation, the Discount Note Indenture.
(xii) A guaranty in substantially the form of Exhibit I hereto
(together with each other guaranty delivered pursuant to Section 5.01(m),
in each case as amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with its terms, and as permitted
by this Agreement, the "Subsidiary Guaranty"), duly executed by each
-------------------
Subsidiary Guarantor.
(xiii) Certified copies of each of the Related Documents, duly
executed by each of the parties thereto and in form and substance
satisfactory to the Lender Parties, together with all agreements,
instruments and other documents delivered in connection therewith as the
Agent shall request.
(xiv) Such financial, business and other information regarding
the Parent Guarantor and its Subsidiaries as the Lender Parties shall have
reasonably requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under Plans, Multiemployer Plans and Welfare Plans, collective
bargaining agreements and other arrangements with employees, audited annual
financial statements dated January 29, 1996, January 28, 1997 and January
27, 1998, interim financial statements dated March 7, 1998, the
Consolidated pro forma balance sheet of the Parent Guarantor and its
Subsidiaries and the Borrower and its Subsidiaries, in each case, taken as
a whole, after giving effect to the Refinancing and the other transactions
contemplated hereby and by the other Related Documents, dated as of March
7, 1998 and forecasts prepared by management of the Parent Guarantor in
form and substance reasonably satisfactory to the Lender Parties, of
balance sheets, income statements and cash flow statements on a monthly
basis for the first year following the date of the Initial Extension of
Credit and on an annual basis for each year thereafter until the scheduled
Termination Date.
(xv) Certificates and letters, in substantially the form of
Exhibits M-1, M-2 and N, respectively, attesting to the Solvency of the
Parent Guarantor and its Subsidiaries and the Borrower and its
Subsidiaries, in each case taken as a whole, after giving effect to the
Refinancing and the other transactions contemplated hereby and by the
Related Documents, from the chief financial officer of the Parent
Guarantor.
(xvi) [intentionally omitted]
51
(xvii) A letter, in form and substance satisfactory to the Agent,
from the Parent Guarantor to Ernst & Young, LLP, its independent certified
public accountants, advising such accountants that, upon notice to the
Borrower from the Agent, the Agent and the Lender Parties have been
authorized to exercise all rights of the Parent Guarantor to require such
accountants to disclose to the Lenders any and all financial statements and
any other information of any kind that such accountants may have with
respect to the Parent Guarantor and its Subsidiaries and directing such
accountants to comply with any reasonable request of the Agent or any
Lender Party for such information.
(xviii) Evidence of insurance naming the Agent as additional
insured or loss payee, as the case may be, with such responsible and
reputable insurance companies or associations, and in such amounts and
covering such risks, as is satisfactory to the Lender Parties, including,
without limitation, business interruption insurance and product liability
insurance.
(xix) An intellectual property security agreement in
substantially the form of Exhibit G hereto (together with each other
intellectual property security agreement and security agreement supplement
delivered pursuant to Section 5.01(m), in each case as amended, amended and
restated, supplemented or otherwise modified from time to time in
accordance with its terms, and as permitted by this Agreement, the
"Intellectual Property Security Agreement"), duly executed by each Loan
----------------------------------------
Party, together with evidence that all action that the Agent may deem
necessary or desirable in order to perfect and protect the first priority
Liens and security interests created under the Intellectual Property
Security Agreement have been taken.
(xx) A Canadian security agreement in substantially the form of
Exhibit H hereto (as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with its terms, and as
permitted by this Agreement, the "Canadian Security Agreement"), duly
---------------------------
executed by IA Canada, together with evidence that all action that the
Agent may deem necessary or desirable in order to perfect and protect the
first priority liens and security interests created under the Canadian
Security Agreement has been taken.
(xxi) Landlord consent for the Lewiston, Maine warehouse
facilities in form and substance satisfactory to the Agent.
(xxii) The satisfaction and termination of the Existing Credit
Facilities.
(xxiii) Blocked Account Letters (as defined in the Security
Agreement) in form and substance satisfactory to the Agent entered into by
the Borrower and each other Loan Party covering all existing deposit
accounts as of the date of the Initial Extension of Credit (other than any
deposit account with a deposit balance at all times less than $250,000), as
listed on Schedule 3.01(k)(xxiii).
(xxiv) A favorable opinion of Ropes & Xxxx, special counsel for
the Loan Parties, in substantially the form of Exhibit K hereto.
52
(xxv) Favorable opinions of local counsel to the Loan Parties,
in substantially the form of Exhibit L hereto.
(xxvi) An intercompany Subordination Agreement in substantially
the form of Exhibit F hereto (as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance
with its terms, and as permitted by this Agreement, the "Intercompany
------------
Subordination Agreement"), duly executed by the Borrower.
-----------------------
(xxvii) A Borrowing Base Certificate certifying as to Inventory
and Receivable balances for the period ended April 4, 1998.
(xxviii) A Notice of Borrowing relating to the Initial Extension
of Credit.
SECTION 3.02. Conditions Precedent to Each Borrowing, Swing Line
--------------------------------------------------
Advance and Issuance of Letters of Credit. The obligation of each Appropriate
-----------------------------------------
Lender to make an Advance (other than a Letter of Credit Advance made by an
Issuing Bank or a Working Capital Lender pursuant to Section 2.03(c) and a Swing
Line Advance made by a Working Capital Lender pursuant to Section 2.02(b)) on
the occasion of each Borrowing (including the Initial Extension of Credit), and
the obligation of each Issuing Bank to issue a Letter of Credit (including the
initial issuance) of a Letter of Credit and the obligation of the Swing Line
Bank to make Swing Line Advances, shall be subject to the further conditions
precedent that on the date of such Borrowing (including a Swing Line Borrowing
made by the Swing Line Bank) issuance or Swing Line Borrowing (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing (including a Swing Line Borrowing made by the Swing Line Bank), Notice
of Issuance and the acceptance by the Borrower of the proceeds of such Borrowing
or of such Letter of Credit shall constitute a representation and warranty by
the Borrower that both on the date of such notice and on the date of such
Borrowing or issuance such statements are true and correct):
(i) the representations and warranties contained in each Loan
Document are true and correct on and as of such date, both before and after
giving effect to such Borrowing or issuance and to the application of the
proceeds therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or issuance, in which
case, as of such specific date;
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default;
(iii) for each Acquisition Borrowing, such Borrowing shall be in
compliance with the terms set forth in Section 5.02(f)(xi), 5.02(f)(xvi) or
5.02(f)(xvii), as applicable, and, if requested by the Agent or the
Required Lenders, the Borrower will provide the Lender Parties with
certificates and letters of the type referred to in Section 3.01(k)(xv)
after giving effect to the application of proceeds from such Borrowing; and
(iv) for each Working Capital Advance or Swing Line Advance made by
the Swing Line Bank or issuance of any Letter of Credit, the sum of the
Loan Values of the Eligible Collateral (as determined based on the most
recent Borrowing Base Certificate delivered to the Lender Parties
53
hereunder) exceeds the aggregate principal amount of Working Capital
Advances plus Swing Line Advances plus Letter of Credit Advances to be
---- ----
outstanding plus the aggregate Available Amount of all Letters of Credit
----
then outstanding after giving effect to such Advance or issuance,
respectively;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Appropriate Lender Party through the Agent may reasonably
request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
---------------------------------
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender Party prior to the Initial
Extension of Credit specifying such Lender Party's objection thereto, and, if
the Initial Extension of Credit consists of a Borrowing, such Lender Party shall
not have made available to the Agent such Lender Party's ratable portion of such
Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower and the
------------------------------------------------------
Parent Guarantor. The Borrower and the Parent Guarantor each represents and
----------------
warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires it
to so qualify or be licensed, except where the failure to so qualify or be
licensed could not be reasonably likely to have a Material Adverse Effect
and (iii) has all requisite corporate power and authority (including,
without limitation, all governmental licenses, permits and other approvals)
to own or lease and operate its properties and to carry on its business as
now conducted and as proposed to be conducted. All of the outstanding
common stock of the Parent Guarantor has been validly issued, is fully paid
and non-assessable and is owned by the Investor Group in the amounts and
types specified in Part I of Schedule 4.01(a) hereto free and clear of all
Liens. All of the outstanding preferred stock of the Parent Guarantor is
owned by the Investor Group in the amounts and types specified in Part I of
Schedule 4.01(a) hereto free and clear of all Liens. All of the
outstanding capital stock of the Borrower has been validly issued, is fully
paid and non-assessable and is owned by the Parent Guarantor in the amounts
and types specified in Part II of Schedule 4.01(a) hereto free and clear of
all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the date of the
Initial Extension of Credit (as to each such Subsidiary) the jurisdiction
of its incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date of the Initial
Extension of Credit and the percentage of the outstanding shares of each
such class owned (directly or indirectly) by such Loan
54
Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights as of the
date of the Initial Extension of Credit. All of the outstanding capital
stock of all of each Loan Party's Subsidiaries has been validly issued, is
fully paid and non-assessable and is owned by such Loan Party or one or
more of its Subsidiaries free and clear of all Liens, except those created
under the Loan Documents. Each such Subsidiary (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires it
to so qualify or be licensed except where the failure to so qualify or be
licensed could not be reasonably likely to have a Material Adverse Effect
and (iii) has all requisite corporate power and authority (including,
without limitation, all governmental licenses, permits and other approvals)
to own or lease and operate its properties and to carry on its business as
now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party of
each Transaction Document to which it is or is to be a party, and the
consummation of the Refinancing and the other transactions contemplated by
the Transaction Documents, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or bylaws, (ii) violate any law, rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party, any of its Subsidiaries or any of
their properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which could be reasonably likely to have a Material
Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of any Transaction Document to
which it is or is to be a party, or for the consummation of the Refinancing
or the other transactions contemplated by the Transaction Documents, (ii)
the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority nature
thereof) other than in connection with the proper filing and recordation of
the Collateral Documents or (iv) the exercise by the Agent or any Lender
Party of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d) hereto, all of which have been duly obtained, taken, given or made
and are in full force and effect. All applicable waiting periods in
connection with the Refinancing and the other transactions contemplated by
the Transaction Documents have expired without any action having been taken
by any competent authority restraining, preventing or imposing materially
adverse conditions upon the Refinancing or the rights of the Loan Parties
or their Subsidiaries freely to transfer
55
or otherwise dispose of, or to create any Lien on, any properties now owned
or hereafter acquired by any of them.
(e) This Agreement has been, and each other Transaction Document when
executed and delivered will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Transaction
Document when delivered will be, the legal, valid and binding obligation of
each Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or limiting creditors' rights or by equitable principles generally.
(f) The Consolidated and consolidating balance sheets of the Parent
Guarantor and its Subsidiaries as at January 30, 1998 and the related
Consolidated and consolidating statements of income and a Consolidated
statement of cash flow of the Parent Guarantor and its Subsidiaries for the
fiscal year then ended, accompanied, as to such Consolidated financial
statements, by an unqualified opinion of Ernst & Young LLP, independent
public accountants, and the Consolidated and consolidating balance sheets
of the Parent Guarantor and its Subsidiaries as at March 7, 1998 and the
related Consolidated and consolidating statements of income and a
Consolidated statement of cash flow of the Parent Guarantor and its
Subsidiaries for the one month then ended, as to all such financial
statements, duly certified by the chief financial officer of the Parent
Guarantor, copies of which have been furnished to each Lender Party, fairly
present, subject, in the case of said balance sheet as at March 7, 1998,
and said statements of income and cash flow for the one month then ended,
to year-end audit adjustments, the Consolidated financial condition of the
Parent Guarantor and its Subsidiaries as at such dates and the results of
operations of the Parent Guarantor and its Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis. Since January 30, 1998 there has
been no Material Adverse Change.
(g) The Consolidated forecasted balance sheets, statements of income
and statements of cash flow of the Parent Guarantor and its Subsidiaries
delivered to the Lender Parties pursuant to Section 3.01(k)(xiv) or 5.03
were prepared in good faith on the basis of the assumptions stated therein,
which assumptions were fair in light of conditions existing at the time of
delivery of such forecasts and at the time of the Initial Extension of
Credit, and represented the Parent Guarantor's best estimate of its future
financial performance.
(h) Neither the Information Memorandum nor any other information,
exhibit or report (excluding any financial projections), taken as a whole,
furnished by or on behalf of any Loan Party or any of its Subsidiaries to
the Agent or any Lender Party in connection with the negotiation of the
Loan Documents or pursuant to the terms of the Loan Documents contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading in light of
the circumstances under which such information was provided and on the date
of the Initial Extension of Credit.
(i) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or, to the knowledge of any Loan Party,
threatened before any court, governmental agency or arbitrator that (i)
could be
56
reasonably likely to have a Material Adverse Effect or (ii) purports to
affect the legality, validity or enforceability of the Refinancing or any
Transaction Document or the consummation of the transactions contemplated
by the Transaction Documents.
(j) No proceeds of any Advance or drawings under any Letter of Credit
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
(k) No Loan Party is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance or drawings under any Letter of Credit will be used to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(l) Set forth on Schedule 4.01(l) hereto is a complete and accurate
list as of the end of the immediately preceding fiscal quarter of all
Plans, Multiemployer Plans and Welfare Plans.
(m) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(n) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA, of
each Plan exceeds 90%, and there has been no material adverse change in the
funding status of any such Plan since such date.
(o) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Lender Parties, is
complete and accurate and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material adverse
change in such funding status.
(p) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan.
(q) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(r) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(s) To the knowledge of the Borrower, neither the business nor the
properties of any Loan Party or any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or
other
57
casualty (whether or not covered by insurance) that could be reasonably
likely to have a Material Adverse Effect.
(t) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past claims of non-
compliance with such Environmental Laws and Environmental Permits have been
resolved without ongoing obligations or costs, and no circumstances exist
that could be reasonably likely to (i) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of their
respective properties that could be reasonably likely to have a Material
Adverse Effect or (ii) cause any such property to be subject to any
material restrictions on ownership, occupancy, use or transferability under
any Environmental Law.
(u) None of the properties currently or, to the knowledge of the Loan
Parties and their Subsidiaries, formerly owned or operated by any Loan
Party or any of its Subsidiaries is listed or, to the knowledge of the
Borrower and the Parent Guarantor, proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list or, to the
knowledge of the Borrower and the Parent Guarantor, is adjacent to any such
property; except as disclosed on Schedule 4.01(u) hereto, there are no and,
to the knowledge of the Borrower and the Parent Guarantor, never have been
any underground or aboveground storage tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are being
or have been treated, stored or disposed of on any property currently owned
or operated by any Loan Party or any of its Subsidiaries or, to the best
knowledge of the Borrower and the Parent Guarantor, on any property
formerly owned or operated by any Loan Party or any of its Subsidiaries;
there is no asbestos or asbestos-containing material on any property
currently owned or operated by any Loan Party or any of its Subsidiaries;
and Hazardous Materials have not been released, discharged or disposed of
on any property currently or, to the knowledge of the Borrower and the
Parent Guarantor, formerly owned or operated by any Loan Party or any of
its Subsidiaries in a manner reasonably likely to result in a Material
Adverse Effect.
(v) Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with
other potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any governmental
or regulatory authority or the requirements of any Environmental Law, and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or, to the knowledge of the
Borrower and the Parent Guarantor, formerly owned or operated by any Loan
Party or any of its Subsidiaries have been disposed of in a manner not
reasonably likely to result in material liability to any Loan Party or any
of its Subsidiaries.
(w) To the knowledge of the Loan Parties and their Subsidiaries,
neither any Loan Party nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could be
reasonably likely to have a Material Adverse Effect.
(x) The Collateral Documents create a valid and, once properly filed
or recorded, perfected first priority security interest in the Collateral
securing the payment of the Secured
58
Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been (or, promptly
following the closing, will be) duly taken. The Loan Parties are the legal
and beneficial owners of the Collateral free and clear of any Lien, except
for the Liens and security interests created or permitted under the Loan
Documents and Permitted Liens.
(y) Each Loan Party and each of its Subsidiaries and Affiliates has
filed, has caused to be filed or has been included in all tax returns
(federal, state, material local and foreign) required to be filed and has
paid all taxes shown thereon to be due (other than as permitted under
Section 5.01(b)), together with applicable interest and penalties.
(z) Set forth on Schedule 4.01(z) hereto is a complete and accurate
list, as of the date of the Initial Extension of Credit, of each taxable
year of each Loan Party and each of its Subsidiaries and Affiliates for
which federal income tax returns have been filed and for which the
expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an "Open
----
Year").
----
(aa) There is no unpaid amount, as of the date of the Initial
Extension of Credit, of adjustments to the federal income tax liability of
each Loan Party and each of its Subsidiaries and Affiliates proposed by the
Internal Revenue Service with respect to Open Years. No issues have been
raised by the Internal Revenue Service in respect of Open Years that, in
the aggregate, could have a Material Adverse Effect.
(bb) There is no unpaid amount, as of the date of the Initial
Extension of Credit, of adjustments to the state, local and foreign tax
liability of any Loan Party or any of its Subsidiaries or Affiliates
proposed by any state, local and foreign taxing authorities (other than
amounts arising from adjustments to federal income tax returns, if any, or
adjustments being contested in good faith). No issues have been raised by
such taxing authorities that, in the aggregate, could have a Material
Adverse Effect.
(cc) The Parent Guarantor and each of its Subsidiaries have, as of the
date of the Initial Extension of Credit, no net operating loss
carryforwards for U.S. federal income tax purposes.
(dd) Neither any Loan Party nor any of its Subsidiaries is an
"investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby will violate any
provision of such Act or any rule, regulation or order of the Securities
and Exchange Commission thereunder.
(ee) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(ff) Set forth on Schedule 4.01(ff) hereto is a complete and accurate
list of all Existing Debt (other than Surviving Debt), showing as of the
date of the Initial Extension of Credit the principal amount outstanding
thereunder, the maturity date thereof and the amortization schedule
therefor.
59
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date of the Initial Extension of Credit the
street address, county or other relevant jurisdiction, state, record owner
and book and fair value thereof. Each Loan Party or such Subsidiary has
good, marketable and insurable fee simple title to such real property, free
and clear of all Liens, other than Liens created or permitted by the Loan
Documents. To the best knowledge of the Loan Parties, all of the
improvements located on the properties listed on Schedule 4.01(gg) hereto
lie entirely within the boundaries of such properties, and none of such
improvements violate any minimum set-back requirements, other dimensional
regulations or restrictions of record.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of
its Subsidiaries is the lessee, showing as of the date of the Initial
Extension of Credit the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual rental cost
thereof. Each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms and neither any
Loan Party nor any of its Subsidiaries has given nor received any notice of
default or termination thereunder.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries,
showing as of the date of the Initial Extension of Credit the amount,
obligor or issuer and maturity, if any, thereof.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and copyrights,
and all applications therefor and licenses thereof, of each Loan Party and
each of its Subsidiaries, showing as of the date of the Initial Extension
of Credit the jurisdiction in which registered, the registration number,
the date of registration and the expiration date.
(kk) IAIC does not conduct any business and has no material assets
other than passive investment assets held on a basis consistent with past
practices.
ARTICLE V
COVENANTS OF THE BORROWER AND THE PARENT GUARANTOR
SECTION 5.01. Affirmative Covenants. So long as any Obligation of
---------------------
any Loan Party under or in respect of any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender Party shall have any Commitment hereunder, the Borrower and
the Parent Guarantor shall:
(a) Compliance with Laws, Etc. Comply, and cause each of their
-------------------------
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
60
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of their
----------------
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
any of them or upon any of their property and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon any of their property; provided,
--------
however, that neither the Borrower nor the Parent Guarantor nor any of
-------
their respective Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to any
of their property and becomes enforceable against their other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
----------------------------------
their Subsidiaries and all lessees and other Persons operating or occupying
their properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of their Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of
their Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of their
properties, in accordance with the requirements of all Environmental Laws;
provided, however, that neither the Borrower nor the Parent Guarantor nor
--------- -------
any of their respective Subsidiaries shall be required to undertake any
such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to
such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of their
------------------------
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is customarily carried by companies engaged in similar businesses as the
Borrower and owning similar properties in the same general areas in which
the Borrower, the Parent Guarantor or such Subsidiary operates; and
maintain key man life insurance on Xxxxxx X. Xxxxxx in an amount not less
than $8,000,000 (which amount may be reduced by $2,000,000 on April 27,
1999 and on each anniversary thereafter), for the period from the date such
insurance was obtained until the earlier of (i) the Termination Date or
(ii) the later of the date that Xxxxxx X. Xxxxxx ceases to be (x) an
employee of the Borrower of the Parent Guarantor or (y) the chairman of the
board of directors of the Borrower or the Parent Guarantor, with an
insurance carrier and pursuant to an insurance policy reasonably
satisfactory to the Agent, which policy shall at all times be subject to an
Assignment of Life Insurance Policy to the Agent for the benefit of the
Secured Parties.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
----------------------------------------
and cause each of their Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory), material permits,
material licenses, material approvals, material privileges and franchises;
provided, however, that the Borrower may consummate any merger or
-------- -------
consolidation permitted under Section 5.02(d).
(f) Visitation Rights. At any reasonable time and from time to time,
-----------------
upon reasonable prior notice, permit the Agent or any of the Lender Parties
or any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the
61
properties of, the Parent Guarantor or any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Parent Guarantor or any
of its Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(g) Preparation of Environmental Reports. At the request of the
------------------------------------
Agent at the following times: (i) upon the occurrence and during the
continuance of an Event of Default, (ii) upon the acquisition of real
property by any Loan Party or any of its Subsidiaries (in which case the
Agent's request shall be limited to the real property being acquired) and
(iii) at any time when the Lender Parties have reason to believe that a
condition exists or an event has occurred with respect to any properties
owned or operated by the Borrower or any Subsidiary that may result in
material liability pursuant to any Environmental Law, use commercially
reasonable efforts to provide to the Lender Parties within 60 days after
such request, at the expense of the Borrower, a Phase I environmental site
assessment report for any of its or its Subsidiaries' properties described
in such request which, if requested by the Required Lenders, may present
significant liability or potential liability pursuant to an Environmental
Law, prepared by an environmental consulting firm acceptable to the Agent
(and, if based upon the recommendation of such environmental consulting
firm, a Phase II environmental site assessment report) indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance, removal or remedial action in connection with any Hazardous
Materials on such properties; without limiting the generality of the
foregoing, if the Agent determines at any time that a material risk exists
that any such report will not be provided within the time period referred
to above, the Agent may retain an environmental consulting firm to prepare
such report at the expense of the Borrower, and each of the Borrower and
the Parent Guarantor hereby grants and agrees to cause any Subsidiary that
owns any property described in such request to grant at the time of such
request, to the Agent, the Lender Parties, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to
the rights of tenants, to enter onto their respective properties to
undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of their Subsidiaries to
----------------
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Borrower, the Parent Guarantor and each such Subsidiary in accordance
with generally accepted accounting principles.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
------------------------------
each of their Subsidiaries to maintain and preserve, all of their
properties that are reasonably required in the conduct of their business in
good working order and condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
-----------------------------------
otherwise perform all obligations in respect of all leases of real property
to which the Parent Guarantor or any of its Subsidiaries is a party, keep
such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or
canceled, notify the Agent of any material default by any party with
respect to such leases and cooperate with the Agent in all respects to cure
any such default, and cause each of their Subsidiaries to do so; provided,
--------
however, that the Borrower may engage in good faith disputes with landlords
-------
of and lease real property (other than the property subject to the Lewiston
Lease), and may, in its reasonable discretion, terminate the leases for
such real property if such termination would not have a Material Adverse
Effect; provided further that
-------- -------
62
the Borrower may engage in good faith disputes with the landlord of the
property subject to the Lewiston Lease and may, in its reasonable
discretion, terminate the lease for such real property so long as, in each
case, such disputes or termination is not reasonably likely to have a
material adverse effect on the business, condition (financial or
otherwise), operations, performance, properties or prospects of Falcon
taken as a whole.
(k) Performance of Related Documents. Perform and observe all of the
--------------------------------
terms and provisions of each Related Document and each other material
agreement to be performed or observed by the Parent Guarantor or any of its
Subsidiaries, maintain each such Related Document in full force and effect,
enforce such Related Document in accordance with its terms, take all such
action to such end as may be from time to time requested by the Agent and,
upon request of the Agent, make to each other party to each such Related
Document such demands and requests for information and reports or for
action as the Borrower or the Parent Guarantor is entitled to make under
such Related Document.
(l) Transactions with Affiliates. Conduct, and cause each of their
----------------------------
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Parent Guarantor or any of its
Subsidiaries than it would obtain in a comparable arm's-length transaction
with a Person not an Affiliate. Nothing herein is intended or shall be
construed to (a) limit the performance by the Borrower or any of its
Affiliates of obligations under the Fenway Management Agreement so long as
no Default shall have occurred and be continuing or (b) restrict the
ability of the Loan Parties to enter into any transaction not prohibited
hereby in the ordinary course of business and which would not have a
Material Adverse Effect.
(m) Covenant to Give Security and Guaranties. (i) At such time as
----------------------------------------
any new direct or indirect Subsidiaries of any Loan Party are formed or
acquired by such Loan Party and at the expense of the Borrower, within 10
days after such formation or acquisition, cause each such Subsidiary
(including, without limitation, to the extent that no adverse tax
consequences would result therefrom, any Foreign Subsidiary) and cause each
direct and indirect parent (other than the Borrower, but, including,
without limitation, to the extent that no adverse tax consequences would
result therefrom, any Foreign Subsidiary) of such Subsidiary, if it has not
already done so, to duly execute and deliver to the Agent a guaranty or
guaranty supplement, in form and substance satisfactory to the Agent,
guaranteeing all of the other Loan Parties' Obligations under the Loan
Documents;
(ii) At such time as any new direct or indirect Subsidiaries of any
Loan Party are formed or acquired by such Loan Party and at the expense of
the Borrower, within 10 days after such formation or acquisition, duly
execute and deliver, and cause each such Subsidiary (other than any Foreign
Subsidiary) and each direct and indirect parent of such Subsidiary, if it
has not already done so, to duly execute and deliver, to the Agent,
security agreements (pledging the capital stock of its Subsidiaries) and
pledge agreements (granting a security interest in Collateral),
respectively, as specified by and in form and substance satisfactory to the
Agent, securing payment of all Obligations of the Loan Parties, such
Subsidiary or such parent, as the case may be, under the Loan Documents and
constituting Liens on all such properties; such pledge shall cover not more
than 66% of the outstanding capital stock of any Foreign Subsidiary if it
is directly owned by a Loan Party and not cover any of the outstanding
capital stock of such Foreign Subsidiary if it is indirectly owned;
63
(iii) Upon the reasonable request of the Agent and at the expense of
the Borrower, (A) within 10 days after such request, furnish to the Agent a
description of the real and personal properties of the Borrower and the
Parent Guarantor and their Subsidiaries in detail satisfactory to the
Agent, (B) within 15 days after such request, use commercially reasonable
efforts to duly execute and deliver, and cause each such Subsidiary, and
cause each direct and indirect parent of such Subsidiary (including,
without limitation, to the extent that no adverse tax consequences would
result therefrom, a Foreign Subsidiary) to duly execute and deliver to the
Agent mortgages, pledges, assignments and other security agreements, as
specified by and in form and substance reasonably satisfactory to the
Agent, securing payment of all the Obligations of the Loan Parties under
the Loan Documents and constituting Liens on all such properties, (C)
within 30 days after such request, take whatever action, and cause each
such Subsidiary, and cause each direct and indirect parent of such
Subsidiary (including, without limitation, to the extent that no adverse
tax consequences would result therefrom, a Foreign Subsidiary) to take
whatever action (including, without limitation, the recording of mortgages,
the filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may be necessary
or advisable in the reasonable opinion of the Agent to vest in the Agent
(or in any representative of the Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments and security agreements delivered pursuant
to this Section 5.01(m)(iii), enforceable against all third parties in
accordance with their terms, (D) within 60 days after such request, deliver
to the Agent, upon the request of the Agent in its reasonable discretion, a
signed copy of a favorable opinion, addressed to the Agent and the other
Secured Parties, of counsel for the Loan Parties reasonably acceptable to
the Agent as to the matters contained in clauses (i) and (ii) of this
Section 5.01(m) and subclauses (B) and (C) of this Section 5.01(m)(iii), as
to such guaranties, guaranty supplements, mortgages, pledges, assignments
and security agreements being legal, valid and binding obligations of each
such Loan Party enforceable in accordance with their terms and as to such
other matters as the Agent may reasonably request, (E) as promptly as
practicable after such request, deliver, upon the request of the Agent in
its reasonable discretion, to the Agent with respect to real property
acquired after the date hereof by the Loan Parties, surveys meeting the
criteria specified in Section 3.01(k)(viii)(B) and the Mortgage Policy and
(F) at any time and from time to time promptly execute and deliver any and
all further instruments and documents and take all such other action as the
Agent may deem reasonably necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of, such guaranties,
guaranty supplements, mortgages, pledges, assignments and security
agreements;
(iv) At any time and from time to time, promptly execute and deliver
and cause each of their Subsidiaries to promptly execute and deliver any
and all further instruments and documents and take all such other action as
the Agent may deem reasonably necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of, the guaranties,
mortgages, pledges, assignments and security agreements referred to in
clauses (i), (ii) and (iii) above; and
(v) At the time of any loan to Xxxxxx X. Xxxxxx in accordance with
Section 5.02(f)(xv) and at the expense of the Borrower, duly execute and
deliver to the Agent a pledge agreement pledging all of Xxxxxx X. Xxxxxx'x
stock of the Parent Guarantor, as specified by and in form and substance
reasonably satisfactory to the Agent, securing payment of all obligations
of Xxxxxx X. Xxxxxx under the promissory note evidencing such loan and
constituting Liens on all such stock.
64
(n) [intentionally omitted].
(o) Syndication. Take all actions which the Agent may reasonably
-----------
request to assist it in forming a syndicate acceptable to it including, but
not limited to: (i) making senior management of the Loan Parties and
representatives of the Loan Parties and the Investor Group available to
participate in informational meetings with potential lenders at such times
and places as the Agent may reasonably request; and (ii) timely providing
the Agent with all information reasonably deemed necessary by the Agent to
successfully complete the syndication, including, without limitation, a
summary of the operating prospects (including financial projections) of the
Parent Guarantor and its Subsidiaries.
(p) Maintenance of Accounts. Maintain and cause each of their
-----------------------
Subsidiaries to maintain Blocked Accounts (as defined in the Security
Agreement) on terms and conditions satisfactory to the Lender Parties.
(q) Further Assurances. (i) Promptly upon request by the Agent, or
------------------
any Lender Party through the Agent, correct any material defect or error
that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and
(ii) Promptly upon request by the Agent, or any Lender Party through
the Agent, do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register any and all such further acts, deeds,
conveyances, pledge agreements, mortgages, deeds of trust, trust deeds,
assignments, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments as the Agent, or any Lender Party through the Agent, may
reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Loan Documents, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C)
perfect and maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created thereunder
and (D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Agent and the Lender parties the rights
granted or now or hereafter intended to be granted to the Agent and the
Lender Parties under any Loan Document or under any other instrument
executed in connection with any Loan Document to which any Loan Party or
any of its Subsidiaries is or is to be a party.
SECTION 5.02. Negative Covenants. So long as any Obligation of any
------------------
Loan Party under or in respect of any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender Party shall have any Commitment hereunder, neither the
Borrower nor the Parent Guarantor shall, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
----------
any of their Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of their properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of their
Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Borrower or the Parent Guarantor or any of their Subsidiaries as debtor, or
sign or suffer to exist, or permit any of their
65
Subsidiaries to sign or suffer to exist, any security agreement authorizing
any secured party thereunder to file such financing statement, or assign,
or permit any of their Subsidiaries to assign, any accounts or other right
to receive income; excluding, however, from the operation of the foregoing
--------- -------
restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 5.02(a)(iii) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(i)(C); provided that no such Lien
--------
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(v) purchase money Liens upon or in real property or equipment
acquired or held by the Borrower or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such
property or equipment or to secure Debt incurred solely for the
purpose of financing the acquisition of any such property or equipment
to be subject to such Liens, or Liens existing on any such property or
equipment at the time of acquisition (other than any such Liens
created in contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that no
-------- -------
such Lien shall extend to or cover any property other than the
property or equipment being acquired, and no such extension, renewal
or replacement shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced; and provided
--------
further that the aggregate principal amount of the Debt secured by
-------
Liens permitted by this clause (v) shall not exceed the amount
permitted under Section 5.02(b)(i)(D) at any time outstanding and that
any such Debt shall not otherwise be prohibited by the terms of the
Loan Documents;
(vi) the filing of financing statements solely as a
precautionary measure in connection with operating leases permitted
under Section 5.02(c);
(vii) the replacement, extension or renewal of any Lien
permitted by clause (iii) of this Section 5.02(a) upon or in the same
property theretofore subject thereto or the replacement, extension or
renewal (without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby; and
(viii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with any Borrower or any
Subsidiary of such Borrower or becomes a Subsidiary of such Borrower;
provided that such Liens were not created in contemplation of such
--------
merger, consolidation or investment and do not extend to any assets
other than those of the Person merged into or consolidated with such
Borrower or such Subsidiary or acquired by such Borrower or such
Subsidiary.
66
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
----
its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(i) in the case of the Borrower, the Parent Guarantor and their
Subsidiaries,
(A) Debt under the Loan Documents,
(B) Debt of the Borrower under the Senior Subordinated
Notes and Debt of the Subsidiary Guarantors consisting of
guaranties of the Senior Subordinated Notes to the extent
required by the Senior Subordinated Note Indenture,
(C) Capitalized Leases not to exceed in the aggregate,
together with Debt permitted under Section 5.02(b)(i)(D),
$3,500,000 at any time outstanding,
(D) Debt secured by Liens permitted by Section 5.02(a)(v)
not to exceed in the aggregate, together with Debt permitted
under Section 5.02(b)(i)(C), $3,500,000 at any time outstanding,
(E) Surviving Debt,
(F) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business,
(G) intercompany Debt; provided that such Debt (w) shall
--------
constitute Pledged Indebtedness, (x) shall be evidenced by
promissory notes in form and substance satisfactory to the Agent
and such promissory notes shall be pledged as security for the
Obligations under the Loan Documents of the holder thereof and
delivered to the Agent pursuant to the terms of the Security
Agreement, (y) shall, with respect to Debt of the Borrower, be
subordinated to the Obligations of the Borrower under the Loan
Documents on terms no less favorable to the Lender Parties than
are set forth on Exhibit F hereto and (z) shall, with respect to
Debt of the Borrower to IAIC, be on a basis consistent with past
practice,
(H) additional unsecured Debt in an aggregate amount not to
exceed $1,000,000 at any time outstanding,
(I) of any Person that becomes a Subsidiary of the Borrower
after the date hereof in accordance with the terms of Section
5.02(f)(xi), 5.02(f)(xvi) or 5.02(f)(xvii) that is existing at
the time such Person becomes a Subsidiary of the Borrower (other
than Debt incurred solely in contemplation of such Person
becoming a Subsidiary of the Borrower); provided that such Debt
--------
shall be subordinated to the Obligations of the Loan Parties
under the Loan Documents pursuant to a Subordination Agreement,
67
(J) Subordinated Debt incurred in connection with management
stock repurchases to the extent the redemption price exceeds that
amount permitted under 5.02(g)(ii); provided that such
--------
Subordinated Debt shall mature not earlier than two years
following the scheduled Termination Date, shall not bear cash
interest until such date, shall contain subordination terms no
less favorable to the Lender Parties than are set forth on Exhibit
F hereto and shall otherwise be on terms acceptable to the Agent,
(K) Debt of the Parent Guarantor in respect of the Parent
Guarantor's obligation to purchase employee options or stock after
the termination of such employee, and
(L) Debt of the Parent Guarantor under the Discount Notes.
(ii) in the case of the Borrower,
(A) Debt in respect of Hedge Agreements designed to hedge
against fluctuations in interest rates or foreign exchange rates
incurred in the ordinary course of business and consistent with
prudent business practice in an aggregate notional amount not to
exceed $75,000,000 for all Hedge Agreements at any time
outstanding, less, in all cases, the aggregate notional amount of
----
any Hedge Agreements that constitute Investments made under
Section 5.02(f)(vii) at such time,
(B) Seller Subordinated Debt incurred in connection with any
Investment permitted by Section 5.02(f)(xi) or 5.02(f)(xvii) or
any Independent Shoe Distributorship Acquisition permitted under
Section 5.02(f)(xvi); provided that such Seller Subordinated Debt
--------
shall mature not earlier than two years following the scheduled
Termination Date, shall not bear cash interest until such date,
shall contain subordination terms no less favorable to the Lender
Parties than are set forth on Exhibit F hereto and shall otherwise
be on terms acceptable to the Agent, and
(C) Debt of the Borrower with respect to retiree benefit
plans to the persons listed on Schedule III hereto in an aggregate
amount not to exceed $562,000 and no more than $68,400 in any
fiscal year.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
-----------------
permit any of their Subsidiaries to create, incur, assume or suffer to
exist, any obligations as lessee (i) for the rental or hire of real or
personal property in connection with any sale and leaseback transaction, or
(ii) for the rental or hire of other real or personal property of any kind
under leases or agreements to lease (including, without limitation,
Capitalized Leases) having an original term of one year or more that would
cause the direct and contingent liabilities of the Parent Guarantor and its
Subsidiaries, on a Consolidated basis, in respect of all such obligations
to exceed $5,000,000 payable in any period of 12 consecutive months.
68
(d) Mergers, Etc. Merge into or consolidate with any Person or permit
------------
any Person to merge into it, or permit any of their Subsidiaries to do so,
except that:
(i) any Subsidiary of the Borrower may merge into or
consolidate with the Borrower or any other wholly-owned U.S.
Subsidiary of the Borrower; provided that, in the case of any such
--------
merger or consolidation, the Person formed by such merger or
consolidation shall be the Borrower or a wholly-owned U.S. Subsidiary
of the Borrower, and
(ii) in connection with any acquisition permitted under Section
5.02(f), any Subsidiary of the Borrower may merge into or consolidate
with any other Person or permit any other Person to merge into or
consolidate with it; provided that the Person surviving such merger
--------
shall be a wholly-owned Subsidiary of the Borrower.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose
----------------------
of, or permit any of their Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets other than Inventory to be
sold in the ordinary course of its business, except:
(i) sales of Inventory (including, without limitation, sales
of obsolete Inventory) in the ordinary course of its business,
(ii) in a transaction authorized by subsection (d) of this
Section 5.02,
(iii) sales or trade-ins of used equipment for fair value in the
ordinary course of business for cash or like assets in an aggregate
amount not to exceed $350,000 in any Fiscal Year, and
(iv) the sale of any asset by the Borrower or any Subsidiary
(other than a bulk sale of Inventory and a sale of Receivables other
than delinquent accounts for collection purposes only) so long as (A)
the purchase price paid to the Borrower or such Subsidiary for such
asset shall be no less than the fair market value of such asset at the
time of such sale, (B) not less than 80% of the purchase price for
such asset shall be paid to the Borrower or such Subsidiary in cash
and (C) the aggregate purchase price paid to the Borrower and all of
its Subsidiaries for such asset and all other assets sold by the
Borrower and such Subsidiaries after the date hereof pursuant to this
clause (iv) shall not exceed $3,000,000.
(f) Investments. Make or hold, or permit any of their Subsidiaries to
-----------
make or hold, any Investment other than:
(i) loans and advances by the Borrower outstanding on the date
hereof to Falcon and additional loans and advances to Falcon;
(ii) loans and advances by the Borrower outstanding on the date
hereof to IA Canada and additional loans and advances by the Borrower
to IA Canada in an aggregate
69
amount, together with Investments permitted by clause (xvii) of this
Section 5.02(f) in entities organized under the laws of Canada, not to
exceed $5,000,000 at any one time outstanding;
(iii) loans and advances by the Borrower outstanding on the date
hereof to Iron Age de Mexico S.A. de C.V. and additional loans and
advances by the Borrower to Iron Age de Mexico S.A. de C.V. in an
aggregate amount not to exceed $1,500,000 at any one time outstanding;
(iv) loans and advances to employees in the ordinary course of
the business of the Borrower as presently conducted in an aggregate
principal amount not to exceed $250,000 at any time outstanding;
(v) Investments by the Borrower and its Subsidiaries in demand
deposit accounts maintained in the ordinary course of business with
any Person of the type referred to in clause (i), (ii), (iii), (iv) or
(v) of the definition of "Eligible Assignee";
-----------------
(vi) Investments by the Borrower in Cash Equivalents in an
aggregate amount not to exceed at any time outstanding $2,500,000;
(vii) Investments by the Borrower in respect of Hedge Agreements
designed to hedge against fluctuations in interest rates or foreign
exchange rates incurred in the ordinary course of business and
consistent with prudent business practice;
(viii) Investments existing on the date hereof and described on
Schedule 4.01(ii) hereto;
(ix) Debt of the Borrower and its Subsidiaries permitted by
Section 5.02(b)(i)(G);
(x) stock or other securities acquired in the ordinary course
of business of the Borrower in connection with the satisfaction or
enforcement of Debt or claims due to the Borrower or as security for
any such Debt or claim;
(xi) additional Investments by the Borrower in wholly-owned U.S.
Subsidiaries (including those permitted by Section 5.02(p)); provided,
--------
however, that the aggregate outstanding amount of equity Investments
-------
pursuant to this clause (xi) shall not exceed $10,000,000; and
provided further that any such additional Investments that are for
-------- -------
Restricted Acquisitions shall meet all of the conditions set forth in
clause (xvii) of this Section 5.02(f);
(xii) loans and advances to management of the Borrower and the
Parent Guarantor to finance any required equity investments of such
management in the Parent Guarantor in the ordinary course of the
business in an aggregate principal amount not to exceed $300,000 at
any time outstanding;
(xiii) Investments in joint ventures in an amount not to exceed
$1,000,000;
70
(xiv) Investments in IAIC solely on a basis consistent with past
practice;
(xv) commencing no earlier than February 1, 2002, loans to
Xxxxxx X. Xxxxxx in an amount not to exceed $3,500,000; provided that
--------
the sum of the aggregate amount of such loans plus the aggregate
----
amount of all stock options and stock repurchased in accordance with
Section 5.02(g)(ii) may not exceed $3,500,000; provided further that
-------- -------
no loan to Xxxxxx X. Xxxxxx may be made in accordance with this clause
(xv) unless all of Xxxxxx X. Xxxxxx'x stock of the Parent Guarantor
has been pledged pursuant to Section 5.01(m)(v);
(xvi) for Independent Shoe Distributorship Acquisitions not to
exceed $1,500,000 in the aggregate in any Fiscal Year; and
(xvii) any Investment by the Borrower either directly or through a
wholly-owned U.S. Subsidiary or Canadian Subsidiary in a Restricted
Acquisition; provided that amounts invested pursuant to this clause
--------
(xvii) in entities organized under the laws of Canada, together with
loans and advances permitted by clause (ii) of this Section 5.02(f),
shall not exceed the amount set forth in such clause (ii); provided
--------
further that:
-------
(1) both before and after giving effect to such
Investment, no Default shall have occurred and be continuing,
(2) such Investment shall be substantially in the same
lines of business or lines of business related thereto in which
the Borrower or its Subsidiaries is engaged on the date hereof,
(3) such Subsidiary shall have complied with the terms
and conditions of Section 5.01(m),
(4) both before and after giving effect to any such
Investment, the Borrower shall be in pro forma compliance with
Section 5.04(a) for the Rolling Period immediately prior to the
date such Investment was made; provided that, for purposes of
--------
determining such compliance, the applicable ratio shall be
determined as though such Rolling Period ended on the next
following Rolling Period,
(5) immediately prior to the making of such Investment,
the Borrower delivers to the Agent a certificate of its chief
financial officer certifying as to compliance with the Leverage
Ratio limits set forth in paragraph (4) of this Section
5.02(f)(xvii) and showing all calculations necessary to determine
such compliance, and
(6) the Agent has received (i) the most recent audited
and unaudited financial statements, including all pro forma
adjustments, for such business or operating division, (ii) the pro
forma combined balance sheet of the Parent Guarantor and its
Subsidiaries and such business or operating division, in each case
as of the
71
most recently ended Rolling Period, and (iii) a schedule of Pro
Forma EBITDA for such business or operating division on a monthly
basis for the latest Rolling Period.
(g) Restricted Payments. Declare or pay any dividends, purchase,
-------------------
redeem, retire, defease or otherwise acquire for value any of its capital
stock or any warrants, rights or options to acquire such capital stock, now
or hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock (other than dividends
constituting shares of its common stock), warrants, rights, options,
obligations or securities to its stockholders as such, or permit any of
their Subsidiaries to do any of the foregoing or permit any of their
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for
value any capital stock of the Borrower or any warrants, rights or options
to acquire such capital stock or to issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, other than:
(i) any Subsidiary of the Borrower may declare and pay cash
dividends to the Borrower or to a wholly-owned U.S. Subsidiary of the
Borrower,
(ii) so long as no Default shall have occurred and be continuing
or would result therefrom, to repurchase management stock options or
stock in the event a manager is no longer employed by the Borrower in
an aggregate amount not to exceed $3,500,000; provided that the
--------
Borrower may declare and pay cash dividends for such purposes limited
to (A) the repurchase of up to $250,000 in the aggregate in any Fiscal
Year for the first five Fiscal Years following the date of the Initial
Extension of Credit and (B) thereafter, only to repurchase the stock
options or stock of Xxxxxx X. Xxxxxx; provided further that the sum of
-------- -------
(x) the aggregate amount of such repurchases of stock options or stock
under this paragraph (ii) plus (y) the aggregate amount of all loans
----
made to Xxxxxx X. Xxxxxx in accordance with Section 5.02(f)(xv) may
not exceed $3,500,000; provided further that the Borrower may also use
-------- -------
for any such repurchase up to $2,000,000 of any proceeds of key man
life insurance received on or about the time of such repurchase,
(iii) so long as no Default shall have occurred and be continuing
or would result therefrom, to issue paid-in-kind dividends on
preferred stock,
(iv) so long as no Default shall have occurred and be continuing
or would result therefrom, to pay the Borrower's and its Subsidiaries'
ratable shares of taxes so long as the Borrower shall have received
such Subsidiaries' ratable share of taxes,
(v) so long as no Default shall have occurred and be continuing
or would result therefrom, to pay reasonable legal fees and
accountants' fees incurred in the ordinary course of business,
(vi) [intentionally omitted],
(vii) so long as no Default shall have occurred and be continuing
or would result therefrom, to pay fees in accordance with the terms of
Section 2 of the Fenway Management Agreement; provided, however, that
-------- -------
in the event of an acquisition of another business
72
contemplated by Section 2(d) of the Fenway Management Agreement and
with respect to any management fees payable pursuant to Section
2(b)(v) of the Fenway Management Agreement, the amount of such
management fee shall not exceed 1/4 of 1% of net sales for the
immediately preceding Fiscal Year,
(viii) a one-time special dividend to be paid to the stockholders
of the Parent Guarantor on the date of the Initial Extension of Credit
in an aggregate a mount not to exceed $17,800,000, and
(ix) to pay fees and expenses, including, without limitation,
legal fees, incurred in connection with the Refinancing, and the other
transactions contemplated by this Agreement, the Loan Documents, the
Discount Note Documents and the Subordinated Debt Documents.
(h) Change in Nature of Business. Make, or permit any of their
----------------------------
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(i) Amendments to Constitutive Documents. Amend, or permit any of its
------------------------------------
Subsidiaries to amend, its certificate of incorporation, bylaws or other
constitutive documents in a manner materially adverse to the interests of
the Secured Parties.
(j) Accounting Changes. Make or permit, or permit any of their
------------------
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as permitted or required by generally accepted
accounting principles or (ii) Fiscal Year; provided, however, promptly upon
-------- -------
making or permitting any change in accounting policies or reporting
practices in accordance with clause (i) of this Section 5.02(j), the
Borrower or the Parent Guarantor shall provide the Agent with a detailed
reconciliation on an ongoing basis reflecting such change.
(k) Prepayments, Etc., of Debt. (i) Prepay, redeem, purchase, defease
--------------------------
or otherwise satisfy prior to the scheduled maturity thereof in any manner,
or make any payment in violation of any subordination terms of, any Debt,
other than (x) the prepayment of the Advances in accordance with the terms
of this Agreement, and (y) if both before and after giving effect to any
such prepayment, redemption, purchase, defeasance or other satisfaction, no
Default has occurred or would result therefrom, regularly scheduled or
required repayments or redemptions of Surviving Debt, or (ii) amend, modify
or change in any manner any term or condition of any Surviving Debt, any
Subordinated Debt or the Discount Notes, or permit any of their
Subsidiaries to do any of the foregoing other than to prepay any Debt
payable to the Borrower.
(l) Amendment, Etc., of Related Documents. Cancel or terminate any
-------------------------------------
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or any such agreement or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term or
condition of any Related Document or any such agreement, agree in any
manner to any other amendment, modification or change of any term or
condition of any Related Document or any such agreement or take any other
action in connection with any Related Document or any such agreement that
would impair the value
73
of the interest or rights of any Loan Party thereunder or that would impair
the rights or interests of the Agent or any Lender Party, or permit any of
their Subsidiaries to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or permit any of
---------------
their Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than (i) in favor of the Secured Parties or
(ii) in connection with (A) any Surviving Debt, (B) any Subordinated Debt,
(C) the Discount Notes and (D) any Debt secured by purchase money Liens and
Capitalized Leases, in each case, to the extent permitted under Sections
5.02(b)(i)(C) and (D), respectively, and solely to the extent such
agreement is limited to the property covered by such Liens.
(n) Partnerships. Become a general partner in any general or limited
------------
partnership or joint venture, or permit any of their Subsidiaries to do so,
other than as permitted pursuant to Section 5.02(f)(xiii).
(o) Other Transactions. Engage, or permit any of their Subsidiaries
------------------
to engage, in any transaction involving commodity options or futures
contracts or any similar speculative transactions (including, without
limitation, take-or-pay contracts), except for Hedge Agreements permitted
under Sections 5.02(b)(ii)(A) and 5.02(f)(vii).
SECTION 5.03. Reporting Requirements. So long as any Obligation of
----------------------
any Loan Party under or in respect of any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender Party shall have any Commitment hereunder, the Parent
Guarantor and the Borrower shall furnish to the Agent and the Lender Parties:
(a) Default Notice. As soon as possible and in any event within two
--------------
Business Days after any officer of any Loan Party obtains knowledge of the
occurrence of each Default or any event, development or occurrence
reasonably likely to have a Material Adverse Effect continuing on the date
of such statement, a statement of the chief financial officer of the Parent
Guarantor setting forth the details of such Default, event, development or
occurrence and the action that the Parent Guarantor has taken and proposes
to take with respect thereto.
(b) Monthly Financials. As soon as available and in any event within
------------------
35 days after the end of each month (other than for each month on which a
fiscal quarter is also ending, in which event such financials shall be
delivered within 50 days), commencing with the month ended April 30, 1998,
Consolidated and consolidating balance sheets of the Parent Guarantor and
its Subsidiaries, the Borrower and its Subsidiaries and the IAC U.S.
Operations, in each case as of the end of such month and Consolidated and
consolidating statements of income and Consolidated statements of cash flow
of the Parent Guarantor and its Subsidiaries, the Borrower and its
Subsidiaries and the IAC U.S. Operations, in each case for the period
commencing at the end of the previous month and ending with the end of such
month and Consolidated and consolidating statements of income and
Consolidated statements of cash flow of the Parent Guarantor and its
Subsidiaries, the Borrower and its Subsidiaries and the IAC U.S.
Operations, in each case for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth
in each case in comparative form the corresponding figures for the
corresponding month and Fiscal Year-to-date period of the preceding
74
Fiscal Year and the corresponding figures for the corresponding month and
Fiscal Year-to-date period of the current annual forecast previously
delivered pursuant to Section 5.03(e), all in reasonable detail and duly
certified by the chief financial officer of the Parent Guarantor, together
with (i) a certificate of the chief financial officer of the Parent
Guarantor stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Parent Guarantor has taken and proposes to
take with respect thereto, (ii) a schedule in form satisfactory to the
Agent of the computations used by the Parent Guarantor in determining
compliance with the covenants contained in Sections 5.04(a) through (e),
(iii) in the event of any change from GAAP in the generally accepted
accounting principles used in the preparation of such financial statements,
a statement of reconciliation conforming such financial statements to GAAP,
and (iv) copies of any presentations to the board of directors of the
Parent Guarantor.
(c) Quarterly Financials. As soon as available and in any event
--------------------
within 50 days after the end of each fiscal quarter of each Fiscal Year,
Consolidated and consolidating balance sheets of the Parent Guarantor and
its Subsidiaries, the Borrower and its Subsidiaries and the IAC U.S.
Operations, in each case as of the end of such fiscal quarter and
Consolidated and consolidating statements of income and a Consolidated
statement of cash flow of the Parent Guarantor and its Subsidiaries, the
Borrower and its Subsidiaries and the IAC U.S. Operations, in each case for
the period commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter and Consolidated and consolidating
statements of income and a Consolidated statement of cash flow of the
Parent Guarantor and its Subsidiaries, the Borrower and its Subsidiaries
and the IAC U.S. Operations, in each case for the period commencing at the
end of the previous Fiscal Year and ending with the end of such fiscal
quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding period and Fiscal Year-to-date period of the
preceding Fiscal Year, all in reasonable detail and duly certified (subject
to year-end audit adjustments) by the chief financial officer of the Parent
Guarantor as having been prepared in accordance with generally accepted
accounting principles consistent with those applied in the most recent
annual audit, together with (i) a certificate of the chief financial
officer of the Parent Guarantor stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Parent Guarantor has taken
and proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Agent of the computations used by the Parent Guarantor
in determining compliance with the covenants contained in Sections 5.04(a)
through (e), (iii) in the event of any change from GAAP in the generally
accepted accounting principles used in the preparation of such financial
statements, a statement of reconciliation conforming such financial
statements to GAAP and (iv) copies of any presentations to the board of
directors of the Parent Guarantor.
(d) Annual Financials. As soon as available and in any event within
-----------------
90 days after the end of each Fiscal Year, a copy of the annual audit
report for such year for the Parent Guarantor and its Subsidiaries,
including therein Consolidated balance sheets of the Parent Guarantor and
its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income and a Consolidated statement of cash flow of the
Parent Guarantor and its Subsidiaries, in each case for the period
commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Year, in each case accompanied by an unqualified opinion of
Ernst & Young, LLP or other independent public accountants of recognized
standing reasonably acceptable to the Required Lenders, and consolidating
balance sheets of the Parent Guarantor and its Subsidiaries as of the end
of such Fiscal
75
Year and consolidating statements of income of the Parent Guarantor and its
Subsidiaries for such Fiscal Year, all in reasonable detail and duly
certified by the chief financial officer of the Parent Guarantor as having
been prepared in accordance with GAAP, together with (i) a certificate of
such accounting firm to the Lender Parties stating that in the course of
the regular audit of the business of the Parent Guarantor and its
Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default under Section 5.04 has occurred
and is continuing, or if, in the opinion of such accounting firm, a Default
under Section 5.04 has occurred and is continuing, a statement as to the
nature thereof, (ii) a schedule in form satisfactory to the Agent of the
computations used by such accounting firm in determining, as of the end of
such Fiscal Year, compliance with the covenants contained in Sections
5.04(a) through (e), (iii) a certificate of the chief financial officer of
the Parent Guarantor stating that no Default has occurred and is continuing
or, if a default has occurred and is continuing, a statement as to the
nature thereof and the action that the Parent Guarantor has taken and
proposes to take with respect thereto, (iv) in the event of any change from
GAAP in the generally accepted accounting principles used in the
preparation of such financial statements, a statement of reconciliation
conforming such financial statements to GAAP and (v) copies of any
presentations to the board of directors of the Parent Guarantor.
(e) Annual Forecasts. As soon as available and in any event no later
----------------
than the end of each Fiscal Year, forecasts prepared by management of the
Parent Guarantor, in form satisfactory to the Agent, of Consolidated
balance sheets, income statements and cash flow statements on a monthly
basis for the Fiscal Year following such Fiscal Year then ended.
(f) ERISA Events and ERISA Reports. (i) Promptly and in any event
------------------------------
within 10 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the chief
financial officer of the Parent Guarantor describing such ERISA Event and
the action, if any, that such Loan Party or such ERISA Affiliate has taken
and proposes to take with respect thereto and (ii) on the date any records,
documents or other information must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA, a copy of such records,
documents and information.
(g) Plan Terminations. Promptly and in any event within two Business
-----------------
Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies
of each notice from the PBGC stating its intention to terminate any Plan or
to have a trustee appointed to administer any Plan.
(h) Actuarial Reports. Promptly and in any event within 30 days after
-----------------
receipt thereof by any Loan Party or any ERISA Affiliate, a copy of the
annual actuarial valuation report of each Plan the funded current liability
percentage (as defined in Section 302(d)(8) of ERISA) of which is less than
90% or the unfunded current liability of which exceeds $250,000.
(i) Plan Annual Reports. Promptly and in any event within 30 days
-------------------
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Plan.
76
(j) Multiemployer Plan Notices. Promptly and in any event within five
--------------------------
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause (i)
or (ii) of this Section 5.03(j).
(k) Litigation. Promptly and in any event within 30 days after the
----------
commencement thereof, notice of all actions, suits, investigations,
litigation and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type described
in Section 4.01(i).
(l) Securities Reports. Promptly and in any event within 30 days
------------------
after the sending or filing thereof, copies of all proxy statements,
financial statements and reports that any Loan Party or any of its
Subsidiaries sends to its stockholders, and copies of all regular, periodic
and special reports, and all registration statements, that any Loan Party
or any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be substituted therefor,
or with any national securities exchange.
(m) Creditor Reports. Promptly and in any event within 30 days after
----------------
the furnishing thereof, copies of any statement or report furnished to any
other holder of the securities of any Loan Party or of any of its
Subsidiaries (including, without limitation, the holders of the Senior
Subordinated Notes) pursuant to the terms of any indenture, loan or credit
or similar agreement and not otherwise required to be furnished to the
Lender Parties pursuant to any other clause of this Section 5.03.
(n) Agreement Notices. Promptly and in any event within 30 days after
-----------------
receipt thereof, copies of all notices, requests and other documents
received by any Loan Party or any of its Subsidiaries under or pursuant to
any Related Document or indenture, loan or credit or similar agreement
regarding or related to any breach or default by any party thereto or any
other event that could materially impair the value of the interests or the
rights of any Loan Party or any of its Subsidiaries or otherwise have a
Material Adverse Effect, and copies of any amendment, modification or
waiver of any provision of any Related Agreement or indenture, loan or
credit or similar agreement and, from time to time upon request by the
Agent, such information and reports regarding the Related Documents as the
Agent may reasonably request.
(o) Revenue Agent Reports. Within 10 days after receipt, copies of
---------------------
all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section 1504(a)(1)
of the Internal Revenue Code) of which the Borrower is a member aggregating
$250,000 or more.
(p) Environmental Conditions. Promptly after the assertion or
------------------------
occurrence thereof, notice of any Environmental Action against or of any
condition or occurrence on any property of any Loan Party or any of its
Subsidiaries that results in a material noncompliance by any Loan Party or
any of
77
its Subsidiaries with any Environmental Law or Environmental Permit that
(i) could be reasonably expected to have a Material Adverse Effect or (ii)
cause any property described in the Mortgages to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(q) Real Property. Within 30 days after the end of each Fiscal Year,
-------------
a report supplementing Schedules 4.01(gg) and 4.01(hh) hereto, including an
identification of all real and leased property disposed of by the Parent
Guarantor or any of its Subsidiaries during such Fiscal Year, a list and
description (including the street address, county or other relevant
jurisdiction, state, record owner, book value thereof, and in the case of
leases of property, lessor, lessee, expiration date and annual rental cost
thereof) of all real property acquired or leased during such Fiscal Year
and a description of such other changes in the information included in such
Schedules as may be necessary for such Schedules to be accurate and
complete.
(r) Insurance. As soon as available and in any event within 30 days
---------
after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for the Parent
Guarantor and its Subsidiaries and containing such additional information
as any Lender Party (through the Agent) may reasonably specify.
(s) Borrowing Base Certificate. As soon as available and in any event
--------------------------
within 30 days after the end of each month, a Borrowing Base Certificate,
as at the end of such month, certified by the chief financial officer of
the Parent Guarantor.
(t) Other Information. Such other information respecting the
-----------------
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Lender Party (through the Agent) may from time to time reasonably request.
(u) Collateral Report. As soon as available and in any event within
-----------------
30 days after the end of each month, a report prepared by the chief
financial officer of the Borrower, in form and substance satisfactory to
the Agent (and, if the Agent so requests, in a form capable of being
processed by the Agent's computers), setting forth (i) the aging of all
Receivables and Inventory and (ii) such other information reasonably
requested by the Agent.
(v) Leases. (i) Promptly after the occurrence thereof, notification
------
to the Agent of (A) any event constituting a default under the Lewiston
Lease, and (B) any material adverse change affecting the premises demised
under the Lewiston Lease and (ii) on a quarterly basis, notification to the
Agent of any change in the list of retail leases shown on Schedule 4.01(hh)
hereto.
SECTION 5.04. Financial Covenants. So long as any Obligation of any
-------------------
Loan Party under or in respect of any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender Party shall have any Commitment hereunder, the Parent
Guarantor shall:
(a) Leverage Ratio. Maintain a Leverage Ratio for each Rolling Period
--------------
set forth below of not more than the amount set forth below for such
Rolling Period:
78
ROLLING PERIOD ENDING CLOSEST TO RATIO
-------------------------------- -----
July 31, 1998 6.25 : 1.00
October 31, 1998 6.25 : 1.00
January 31, 1999 6.25 : 1.00
April 30, 1999 6.25 : 1.00
July 31, 1999 6.25 : 1.00
October 31, 1999 6.25 : 1.00
January 31, 2000 6.00 : 1.00
April 30, 2000 6.00 : 1.00
July 31, 2000 5.75 : 1.00
October 31, 2000 5.75 : 1.00
January 31, 2001 5.50 : 1.00
April 30, 2001 5.50 : 1.00
July 31, 2001 5.50 : 1.00
October 31, 2001 5.25 : 1.00
January 31, 2002 5.25 : 1.00
April 30, 2002 5.00 : 1.00
July 31, 2002 5.00 : 1.00
October 31, 2002 4.75 : 1.00
January 31, 2003 4.75 : 1.00
April 30, 2003 4.50 : 1.00
July 31, 2003 4.50 : 1.00
October 31, 2003 4.25 : 1.00
January 31, 2004 4.25 : 1.00
(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
---------------------------
Ratio for each Rolling Period of not less than 1.10 for such Rolling
Period.
(c) Interest Coverage Ratio. Maintain an Interest Coverage Ratio for
-----------------------
each Rolling Period set forth below of not less than the amount set forth
below for such Rolling Period:
79
ROLLING PERIOD ENDING CLOSEST TO RATIO
-------------------------------- -----
July 31, 1998 1.60 : 1.00
October 31, 1998 1.60 : 1.00
January 31, 1999 1.60 : 1.00
April 30, 1999 1.60 : 1.00
July 31, 1999 1.75 : 1.00
October 31, 1999 1.75 : 1.00
January 31, 2000 1.75 : 1.00
April 30, 2000 1.75 : 1.00
July 31, 2000 1.75 : 1.00
October 31, 2000 1.75 : 1.00
January 31, 2001 1.75 : 1.00
April 30, 2001 1.75 : 1.00
July 31, 2001 2.00 : 1.00
October 31, 2001 2.00 : 1.00
January 31, 2002 2.00 : 1.00
April 30, 2002 2.00 : 1.00
July 31, 2002 2.00 : 1.00
October 31, 2002 2.00 : 1.00
January 31, 2003 2.00 : 1.00
April 30, 2003
and thereafter 1.75 : 1.00
(d) Capital Expenditures. Not make, or permit any of its Subsidiaries
--------------------
to make, any Capital Expenditures that would cause the aggregate of all
such Capital Expenditures made by the Parent Guarantor and its Subsidiaries
in any Fiscal Year set forth below to exceed the amount set forth below for
such Fiscal Year:
FISCAL YEAR AMOUNT
----------- ------
1999 $3,000,000
2000 $3,000,000
2001 $3,500,000
2002 $3,500,000
2003 $4,000,000
2004 $4,000,000
provided, however, that if, at the end of any Fiscal Year (the "Prior
-------- ------- -----
Fiscal Year") set forth above, the amount specified above for such Fiscal
-----------
Year exceeds the amount of Capital Expenditures made by the
80
Parent Guarantor and its Subsidiaries during such Fiscal Year (the amount
of such excess from such prior Fiscal Year being the "Excess Amount"), the
-------------
Parent Guarantor and its Subsidiaries shall be entitled to make additional
Capital Expenditures in the succeeding Fiscal Year in an amount (such
amount being referred to herein as the "Carryover Amount") equal to the
----------------
Excess Amount for such prior Fiscal Year; provided further, however, that
-------- ------- -------
such Carryover Amount may only be used in such succeeding Fiscal Year and
may only be used after utilization of the amount allocated above in this
Section 5.04(d) for such succeeding Fiscal Year.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
-----------------
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same becomes due and payable, or (ii) the Borrower or any other
Loan Party shall fail to pay any interest on any Advance or make any other
payment under any Loan Document within two Business Days of when the same
becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) any Loan Party shall fail to perform or observe any term, covenant
or agreement contained in Xxxxxxx 0.00, 0.00(x), (x), (x), (x), (x) or (n),
5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 20 days
after the date on which a Responsible Officer of the Borrower becomes aware
of such failure; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal or notional amount of at
least $1,000,000 either individually or in the aggregate (but excluding
Debt outstanding hereunder) of such Loan Party or such Subsidiary, as the
case may be, when the same shall become due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt or otherwise to
cause, or to permit the holder thereof to cause, such Debt to mature; or
any such Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a
81
regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 45 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above
in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$1,000,000 (to the extent not fully paid or discharged) shall be rendered
against any Loan Party or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 20 consecutive days
during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against
any Loan Party or any of its Subsidiaries that could reasonably be likely
to have a Material Adverse Effect, and there shall be any period of 20
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01, 5.01(m) or 5.01(q) shall for any reason cease to
be valid and binding on or enforceable against any Loan Party party to such
Loan Document, or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01, 5.01(m) or 5.01(q) shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered
thereby; or
(k) (i) the Fenway Fund shall cease to be the record and beneficial
owner of in excess of 50% of the number of shares of fully diluted common
stock of the Parent Guarantor issued and outstanding; or (ii) any Person or
two or more Persons acting in concert, other than the Investor Group, shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or
their acquisition of the power to exercise, directly or
82
indirectly, a controlling influence over the management or policies of the
Parent Guarantor; or (iii) the Parent Guarantor shall cease to own 100% of
the capital stock of the Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds $1,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $1,000,000 or requires
payments exceeding $250,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $250,000;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Commitments of each Lender Party and the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c) and Swing Line Advances by a Working
Capital Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
-------- -------
event of an actual or deemed entry of an order for relief with respect to any
Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x) the
Commitments of each Lender Party and the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c) and Swing Line Advances by a Working
Capital Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue
Letters of Credit shall automatically be terminated and (y) the Notes, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower; and provided further that the Agent and
-------- -------
the Lenders shall not have the right to declare the Notes and the other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable solely as a result of the occurrence and continuance of an Event of
Default under Section 6.01(o) until the date that is at least 45 days after the
date on which notice of the occurrence and continuance of such Event of Default
shall have been given by the Agent or the Required Lenders to the Borrower (it
being understood
83
and agreed that the suspension of the rights of acceleration of the Lender
Parties set forth in this proviso shall in no way limit or otherwise affect any
of the other consequences provided for in the Loan Documents of, or any of the
other rights and remedies afforded to the Agent or any of the Lender Parties as
a result of, the occurrence and continuance of such Event of Default).
SECTION 6.02. Actions in Respect of the Letters of Credit upon
------------------------------------------------
Default. If any Event of Default shall have occurred and be continuing, the
-------
Agent may, irrespective of whether it is taking any of the actions described in
Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower shall, pay to the Agent on behalf of the Lender Parties
in same day funds at the Agent's office designated in such demand, for deposit
in the L/C Cash Collateral Account, an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding. If at any time the Agent
determines that any funds held in the L/C Cash Collateral Account are subject to
any right or claim of any Person other than the Agent and the Lender Parties or
that the total amount of such funds is less than the aggregate Available Amount
of all Letters of Credit, the Borrower shall, forthwith upon demand by the
Agent, pay to the Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Agent determines to be free and clear of
any such right and claim.
ARTICLE VII
PARENT GUARANTY
SECTION 7.01. Guaranty. The Parent Guarantor hereby unconditionally
--------
and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of each Loan Party
now or hereafter existing under or in respect of the Loan Documents, whether for
principal, interest, fees, expenses or otherwise (such Obligations being the
"Guaranteed Obligations"), and agrees to pay any and all expenses (including,
-----------------------
without limitation, reasonable counsel fees and expenses) incurred by the Agent
or the Lender Parties in enforcing any rights under this Guaranty. Without
limiting the generality of the foregoing, the Parent Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any Loan Party to the Agent or any Lender Party under the Loan
Documents but for the fact that such Obligations are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Loan Party.
SECTION 7.02. Guaranty Absolute. The Parent Guarantor guarantees
-----------------
that the Guaranteed Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, rule, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agent or the Lenders with respect thereto. The Obligations of
the Parent Guarantor under this Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any Loan Party under the Loan Documents,
and a separate action or actions may be brought and prosecuted against the
Parent Guarantor to enforce this Guaranty, irrespective of whether any action is
brought against the Borrower or whether the Borrower is joined in any such
action or actions. The liability of the Parent Guarantor under this Guaranty
shall be irrevocable, absolute and unconditional irrespective of, and the Parent
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any or all of the following:
84
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrower, the
Parent Guarantor or any of their Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of the Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale
or other disposition of any Collateral for all or any of the Guaranteed
Obligations or any other Obligations of any other Loan Party under the Loan
Documents or any other assets of the Borrower, the Parent Guarantor or any
of their Subsidiaries ;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower, the Parent Guarantor or any of
their Subsidiaries; or
(f) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Agent or any Lender Party that might otherwise
constitute a defense available to, or a discharge of, the Borrower, the
Parent Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender Party upon the
insolvency, bankruptcy or reorganization of the Borrower, the Parent Guarantor
or any of their Subsidiaries or otherwise, all as though such payment had not
been made.
SECTION 7.03. Waiver. The Parent Guarantor hereby waives
------
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Agent or any Lender Party protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against the
Borrower or any other Person or any Collateral. The Parent Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Loan Documents and that the waiver
set forth in this Section 7.03 is knowingly made in contemplation of such
benefits.
SECTION 7.04. Payments Free and Clear of Taxes, Etc. (a) Any and
-------------------------------------
all payments made by the Parent Guarantor hereunder shall be made, in accordance
with Section 2.11, free and clear of and without deduction for any and all
present or future Taxes. If the Parent Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
Party or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including
85
deductions applicable to additional sums payable under this Section 7.04) such
Lender Party or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Parent
Guarantor shall make such deductions and (iii) the Parent Guarantor shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Parent Guarantor agrees to pay any present or
future Other Taxes.
(c) The Parent Guarantor shall indemnify each Lender Party and the
Agent for the full amount of Taxes and Other Taxes, and for the full amount of
taxes of any kind imposed by any jurisdiction on amounts payable under this
Section 7.04, paid by such Lender Party or the Agent, as the case may be, and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or the Agent, as the case may be, makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Parent Guarantor shall furnish to the Agent, at its address referred to in
Section 9.02, appropriate evidence of payment thereof. If any Taxes are payable
in respect of any payment hereunder by the Parent Guarantor through an account
or branch outside the United States or on behalf of the Parent Guarantor by a
payor that is not a United States Person, the Parent Guarantor shall furnish, or
shall cause such payor to furnish, to the Agent a certificate from each
appropriate taxing authority or authorities, or an opinion of counsel acceptable
to the Agent, in either case stating that such payment is exempt from or not
subject to Taxes.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement, in the case of each Initial Lender or Initial
Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender Party, in the case of each other
Lender Party, and from time to time thereafter if requested in writing by the
Parent Guarantor or the Agent (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide the Agent and the Parent Guarantor with
two (2) duly completed copies of Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or is entitled to a reduced
rate of United States withholding tax on payments under or in respect of this
Agreement and the Notes. To the extent that any such form becomes obsolete with
respect to any Lender Party, such Lender Party shall, upon the reasonable
written request of the Parent Guarantor to such Lender Party and the Agent (but
only if such Lender Party is lawfully able to do so) provide two (2) copies of
either an updated or successor form to the Parent Guarantor and the Agent. If
the form provided by a Lender Party at the time such Lender Party first becomes
a party to this Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender Party provides the appropriate
form certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods governed by
such form; provided, however, that, if at the date of the Assignment and
-------- -------
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 7.04 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information,
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other than information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service form 1001 or 4224, that
such Lender Party reasonably considers to be confidential, such Lender Party
shall give notice thereof to the Parent Guarantor and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed
to provide the Parent Guarantor with the appropriate form described in
subsection (e) of this Section 7.04 (other than if the Parent Guarantor has
failed to timely request with reasonable notice any appropriate renewal,
successor or any other form or if such form otherwise is not required under
subsection (e) of this Section 7.04), such Lender Party shall not be entitled to
indemnification under subsection (a) or (c) of this Section 7.04 with respect to
Taxes imposed by the United States; provided, however, that should a Lender
-------- -------
Party become subject to Taxes because of its failure to deliver a form required
hereunder, the Parent Guarantor shall take such steps as such Lender Party shall
reasonably request to assist such Lender Party to recover such Taxes.
(g) Without prejudice to the survival of any other agreement of the
Parent Guarantor hereunder, the agreements and obligations of the Parent
Guarantor contained in this Section 7.04 shall survive the payment in full of
the Guaranteed Obligations and all other amounts payable under this Guaranty.
(h) If the Agent or any Lender Party, in its sole opinion,
determines that it has finally and irrevocably received or been granted a refund
in respect of any Taxes or Other Taxes as to which indemnification has been paid
by the Parent Guarantor pursuant to subsection (a) or (c) of this Section 7.04,
it shall promptly remit such refund to the Parent Guarantor, net of all out-of-
pocket expenses of the Agent or such Lender Party; provided, however, that the
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Parent Guarantor, upon the request of the Agent or such Lender Party, agrees
promptly to return such refund to such party in the event such party is required
to repay such refund to the relevant taxing authority. The Agent or such Lender
Party shall provide the Parent Guarantor with a copy of any notice or assessment
from the relevant taxing authority (deleting any confidential information
contained therein) requiring payment of such refund. At the request and expense
of the Parent Guarantor, the Agent or any Lender Party, as the case may be,
shall use commercially reasonable efforts to seek a refund of any Taxes or Other
Taxes as to which indemnification has been paid by the Parent Guarantor pursuant
to subsection (a) or (c) of this Section 7.04. Nothing contained herein shall
impose an obligation on the Agent or any Lender Party to disclose to any party
any information regarding tax affairs and computations.
(i) Any Lender Party claiming any additional amounts payable
pursuant to this Section 7.04 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
SECTION 7.05. Continuing Guaranty; Assignments. This Guaranty is a
--------------------------------
continuing guaranty and shall (a) remain in full force and effect until the
later of (i) the cash payment in full of the Guaranteed Obligations and all
other amounts payable under or in respect of this Guaranty and (ii) the
Termination Date, (b) be binding upon the Parent Guarantor, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Lender
Parties, the Agent and their successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender Party may assign
or otherwise transfer all or any portion of its rights and obligations hereunder
(including, without limitation, all or any portion of its Commitment, the
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Advances owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as provided in
Section 9.07.
SECTION 7.06. Subrogation. The Parent Guarantor shall not exercise
-----------
any rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Parent Guarantor's Obligations under or in respect of this
Agreement or any other Loan Document, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Agent or any Lender Party
against the Borrower or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by setoff or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Obligations
and all other amounts payable under this Guaranty shall have been paid in full
in cash and the Commitments shall have expired or terminated. If any amount
shall be paid to the Parent Guarantor in violation of the preceding sentence at
any time prior to the later of (i) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and (ii) the
Termination Date, such amount shall be held in trust for the benefit of the
Agent and the Lender Parties and shall forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Loan Documents, or to be held as collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If
(i) the Parent Guarantor shall make payment to the Agent or any Lender Party of
all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall be paid in
full in cash and (iii) the Termination Date shall have occurred, the Agent and
the Lender Parties shall, at the Parent Guarantor's request and expense, execute
and deliver to the Parent Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Parent Guarantor of an interest in the Guaranteed Obligations
resulting from such payment by the Parent Guarantor.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Lender Party (in its
------------------------
capacities as a Lender, a Swing Line Bank (if applicable), the Issuing Bank (if
applicable) and a potential Hedge Bank) hereby appoints and authorizes the Agent
to take such action as Agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof and thereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
-------- -------
exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give
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to each Lender Party prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any of
---------------------
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent: (a) may treat the
payee of any Note as the holder thereof until the Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
9.07; (b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender Party and shall not be responsible to
any Lender Party for any statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 8.03. BNP and Affiliates. With respect to its Commitments,
------------------
the Advances made by it and the Notes issued to it, BNP shall have the same
rights and powers under the Loan Documents as any other Lender Party and may
exercise the same as though it were not the Agent; and the term "Lender Party"
or "Lender Parties" shall, unless otherwise expressly indicated, include BNP in
its individual capacity. BNP and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person who may do business with or own
securities of any Loan Party or any such Subsidiary, all as if BNP were not the
Agent and without any duty to account therefor to the Lender Parties.
SECTION 8.04. Lender Party Credit Decision. Each Lender Party
----------------------------
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 8.05. Indemnification. (a) Each Lender Party severally
---------------
agrees to indemnify the Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any
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action taken or omitted by the Agent under the Loan Documents (collectively, the
"Agent Indemnified Costs"); provided, however, that no Lender Party shall be
----------------------- -------- -------
liable for any portion of the Agent Indemnified Costs resulting from the Agent's
gross negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without limiting the generality
of the foregoing, each Lender Party agrees to reimburse the Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) payable by the Borrower
under Section 9.04, to the extent that the Agent is not promptly reimbursed for
such costs and expenses by the Borrower. For purposes of this Section 8.05(a),
the Lender Parties' respective ratable shares of any amount shall be determined,
at any time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties and
(b) their respective Unused Working Capital Commitments and Unused Acquisition
Commitments at such time. In the case of any investigation, litigation or
proceeding giving rise to any Agent Indemnified Costs, this Section 8.05(a)
shall apply whether any such investigation, litigation or proceeding is brought
by the Agent, any Lender, any other Lender Party or a third party. The failure
of any Lender Party to reimburse the Agent promptly upon demand for its ratable
share of any amount required to be paid by the Lender Party to the Agent as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent for such other Lender Party's ratable share of such amount.
(b) Each Lender severally agrees to indemnify the Issuing Bank (to
the extent not promptly reimbursed by the Borrower) from and against such
Lender's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents (collectively, the "Issuing Bank
------------
Indemnified Costs"); provided, however, that no Lender shall be liable for any
----------------- -------- -------
portion of the Issuing Bank Indemnified Costs resulting from the Issuing Bank's
gross negligence or willful misconduct as found in a final non-appealable
judgment by a court of competent jurisdiction. Without limiting the generality
of the foregoing, each Lender agrees to reimburse the Issuing Bank promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) payable by the Borrower
under Section 9.04, to the extent that the Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 8.05(b), the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender Parties, (b) their respective Pro Rata Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time and (c) their
respective Unused Working Capital Commitments and Unused Acquisition Commitments
at such time. In the case of any investigation, litigation or proceeding giving
rise to Issuing Bank Indemnified Costs, this Section 8.05(b) shall apply whether
any such investigation, litigation or proceeding is brought by the Issuing Bank,
any Lender, any other Lender Party or a third party. The failure of any Lender
Party to reimburse the Issuing Bank promptly upon demand for its ratable share
of any amount required to be paid by the Lender Parties to the Issuing Bank as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Issuing Bank for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Issuing Bank for such other Lender Party's ratable share
of such amount.
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(c) Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 8.05(c) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 8.06. Successor Agents. The Agent may resign at any time by
----------------
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders, and so long as no Default has
occurred and is continuing, with the consent of the Borrower (which consent
shall not be unreasonably withheld or delayed), shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States or of any state thereof and having
a combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and upon the execution
and filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. If within 45 days after
written notice is given of the retiring Agent's resignation or removal under
this Section 8.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45/th/ day (i) the retiring Agent's
resignation or removal shall become effective, (ii) the retiring Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Agent under the Loan Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent shall become effective, the provisions
of this Article VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
---------------
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower or any other Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed (or, in the
case of the Collateral Documents, consented to) by the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that (a) no
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amendment, waiver or consent shall, unless in writing and signed by all of the
Lenders, do any of the following at any time: (i) waive any of the conditions
specified in Section 3.01 or, in the case of the Initial Extension of Credit,
Section 3.02, (ii) change the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action
91
hereunder, (iii) release all or substantially all of the Collateral in any
transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all of
the Collateral in any transaction or series of related transactions to secure
any Obligations other than Obligations owing to the Secured Parties under the
Loan Documents or (iv) amend this Section 9.01 and (b) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and each
Lender that has a Commitment under the Acquisition Facility or the Working
Capital Facility if affected by such amendment, waiver or consent, (i) increase
the Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any scheduled date fixed for any payment of principal of, or interest
on, the Notes held by such Lender or any fees or other amounts payable hereunder
to such Lender or (iv) change the order of application of any prepayment set
forth in Section 2.06 in any manner that materially affects such Lender;
provided further that no amendment, waiver or consent shall, unless in writing
-------- -------
and signed by the Swing Line Bank or the Issuing Bank, in addition to the
Lenders required above to take such action, affect the rights or obligations of
the Swing Line Bank or the Issuing Bank under this Agreement; and provided
--------
further that no amendment, waiver or consent shall, unless in writing and signed
-------
by the Agent in addition to the Lenders required above to take such action,
affect the rights or duties of the Agent under this Agreement or the other Loan
Documents.
(b) Each Lender Party grants (x) to the Agent the right to purchase
all (but not less than all) of such Lender Party's Commitments and Advances
owing to it and the Notes held by it and all of its rights and obligations
hereunder and under the other Loan Documents at a price equal to the aggregate
amount of outstanding Advances owed to such Lender Party (together with all
accrued and unpaid interest and fees owed to such Lender), and (y) so long as no
Default has occurred and is continuing, to the Borrower the right to cause an
assignment of all (but not less than all) of such Lender Party's Commitments and
Advances owing to it and the Notes held by it and all of its rights and
obligations hereunder and under the other Loan Documents, which right may be
exercised by the Agent or the Borrower, as the case may be, if such Lender Party
refuses to execute any amendment, waiver or consent which requires the written
consent of all the Lenders and to which the Required Lenders, the Agent and the
Borrower have agreed. Each Lender Party agrees that if the Agent or the
Borrower, as the case may be, exercises its option hereunder, it shall promptly
execute and deliver all agreements and documentation necessary to effectuate
such assignment as set forth in Section 9.07.
SECTION 9.02. Notices, Etc. All notices and other communications
------------
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
by an overnight courier of nationally recognized standing, if to the Borrower or
the Parent Guarantor, each at its address at Xxxxxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxx, XX 00000, Attention: Chief Financial Officer, telecopier number
(000)000-0000; if to any Initial Lender or any Initial Issuing Bank, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender Party, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; and if to
the Agent, at its address at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Structured Finance Group, telecopier number (000) 000-0000; or, as to
each party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall,
when mailed, telegraphed, telecopied, telexed or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the overnight courier,
respectively, except that notices and communications to the Agent pursuant to
Article II,
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III or VIII shall not be effective until received by the Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
-------------------
Lender Party or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower hereby agrees
------------------
to pay on demand (i) all costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, audit, insurance,
consultant, asset appraisal, search, filing and recording fees and expenses and
(B) all other out-of-pocket expenses incurred by the Agent, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto, with respect to advising the Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agent and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Agent and each Lender Party with respect thereto).
(b) Each of the Borrower and the Parent Guarantor agrees to
indemnify and hold harmless the Agent, each Lender Party and each of their
Affiliates and their officers, directors, employees, agents, advisors and other
representatives (each, an "Indemnified Party") from and against any and all
-----------------
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with (i) the Facilities, the actual or proposed use
of the proceeds of the Advances or the Letters of Credit, the Loan Documents or
any of the transactions contemplated thereby, including, without limitation, the
Refinancing and any acquisition or proposed acquisition by the Parent Guarantor
or any of its Subsidiaries or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, or any of their respective properties, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 9.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are
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consummated. Each of the Borrower and the Parent Guarantor also agrees not to
assert any claim against the Agent, any Lender Party or any of their Affiliates,
or any of their respective officers, directors, employees, agents, advisors and
other representatives, on any theory of liability, for special, indirect,
consequential (as opposed to direct) or punitive damages arising out of or
otherwise relating to the Facilities, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated thereby, including, without limitation, the
Refinancing and any acquisition or proposed acquisition by the Parent Guarantor
or any of its Subsidiaries.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 9.07 as a result
of a demand by the Borrower pursuant to Section 9.07(a), the Borrower shall,
upon demand by such Lender Party (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender Party any amounts required to
compensate such Lender Party for any additional losses, costs or expenses that
it may reasonably incur as a result of such payment, including, without
limitation, any loss (excluding, however, loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Agent or any Lender Party, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
9.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. Right of Setoff. Upon (a) the occurrence and during
---------------
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender Party and each of its respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender Party or such Affiliate to or for the credit or the
account of the Borrower or the Parent Guarantor, as the case may be, against any
and all of the Obligations of the Borrower or the Parent Guarantor, as the case
may be, now or hereafter existing under or in respect of this Agreement and the
Note or Notes (if any) held by such Lender Party, irrespective of whether such
Lender Party shall have made any demand under this Agreement or such Note or
Notes and although such obligations may be unmatured. Each Lender Party agrees
promptly to notify the Borrower after any such setoff and application; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such setoff and application. The rights of each Lender Party and its respective
Affiliates under this Section 9.05 are in addition to other rights and remedies
(including, without limitation, other rights of setoff) that such Lender Party
and its respective Affiliates may have.
94
SECTION 9.06. Binding Effect. This Agreement shall become effective
--------------
when it shall have been executed by the Borrower, the Parent Guarantor and the
Agent and when the Agent shall have been notified by each Initial Lender and the
Initial Issuing Bank that such Initial Lender and the Initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Parent Guarantor, the Agent and each Lender Party and their
respective successors and assigns, except that neither the Borrower nor the
Parent Guarantor shall have the right to assign its respective rights or
obligations hereunder or any interest herein without the prior written consent
of the Lender Parties.
SECTION 9.07. Assignments and Participations. (a) Each Lender may
------------------------------
and, so long as no Default has occurred and is continuing, if demanded by the
Borrower (following a demand by such Lender pursuant to Section 2.10, 2.12 or
7.04) shall upon at least 5 Business Days' notice to such Lender and the Agent,
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
-------- -------
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of one or more Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the aggregate amount of the Commitments of the assigning Lender being
assigned to such Eligible Assignee pursuant to such assignment (determined as of
the date of the Assignment and Acceptance with respect to such assignment) shall
in no event be less than $5,000,000 and shall be in an integral multiple of
$500,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) each
such assignment made as a result of a demand by the Borrower pursuant to this
Section 9.07(a) shall be arranged by the Borrower after consultation with the
Agent and shall be either an assignment of all of the rights and obligations of
the assigning Lender under this Agreement or an assignment of a portion of such
rights and obligations made concurrently with another such assignment or other
such assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower pursuant to this
Section 9.07(a) unless and until such Lender shall have received one or more
payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under or in respect of this Agreement, (vi) no such assignments shall be
permitted without the consent of the Agent until the Agent shall have notified
the Lender Parties that syndication of the Commitments hereunder has been
completed, (vii) so long as no Default has occurred and is continuing at the
time of such proposed assignment, no such assignment shall be permitted without
the consent of the Borrower (such consent not to be unreasonably withheld or
delayed), and (viii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,000.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as
the case may be, hereunder and (y) the Lender or Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or
95
the remaining portion of an assigning Lender's or Issuing Bank's rights and
obligations under this Agreement, such Lender or Issuing Bank shall cease to be
a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning Lender
Party makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien or security interest created or purported to
be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any other Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any other instrument
or document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender Party
or any other Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as Agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lender
Parties and the Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
--------
all purposes, absent manifest error, and the Borrower, the Agent and the Lender
Parties may treat each Person whose name is recorded in the Register as a Lender
Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender Party at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. In the case of
any assignment by a Lender, within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it under the
applicable Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note
96
to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1 or X-
0 hereto, as the case may be.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time.
(g) Each Lender Party may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it) to any Person other than any Loan Party
or any of its Subsidiaries or Affiliates; provided, however, that (i) such
-------- -------
Lender Party's obligations under this Agreement (including, without limitation,
its Commitments) shall remain unchanged, (ii) such Lender Party shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender Party shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrower, the Agent and the other
Lender Parties shall continue to deal solely and directly with such Lender Party
in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 9.08. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.09. No Liability of the Issuing Bank. The Borrower
--------------------------------
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon,
97
even if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank against
presentation of documents that do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any similar circumstances whatsoever
in making or failing to make payment under any Letter of Credit, except that the
------
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence as determined in a final,
non-appealable judgment by a court of competent jurisdiction in determining
whether documents presented under any Letter of Credit comply with the terms of
the Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 9.10. Jurisdiction, Etc. (a) Each of the parties hereto
-----------------
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 9.11. Governing Law. This Agreement and the Notes shall be
-------------
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.12. WAIVER OF JURY TRIAL. TO THE EXTENT IT MAY LAWFULLY
--------------------
DO SO, EACH OF THE LOAN PARTIES, THE AGENT AND THE LENDER PARTIES IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
98
TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE AGENT OR ANY
LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
IRON AGE CORPORATION,
as Borrower
By /s/ Xxxxx X. XxXxxxxxx
------------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Executive Vice President
IRON AGE HOLDINGS CORPORATION,
as Parent Guarantor
By /s/ Xxxxx X. XxXxxxxxx
------------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Vice President - Finance
BANQUE NATIONALE DE PARIS,
as Agent
By /s/ Xxxx Xxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxx
Title: VP
By /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: AVP
Initial Lenders
---------------
BANQUE NATIONALE DE PARIS
By /s/ Xxxx Xxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxx
Title: VP
By /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: AVP
Initial Issuing Bank
--------------------
BANQUE NATIONALE DE PARIS
By /s/ Xxxx Xxxxxxxxx
------------------------------------
Name: XXXX XXXXXXXXX
Title: VP
By /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: AVP
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
NAME OF LENDER: BANQUE NATIONALE DE PARIS
Working Capital Commitment: $ 30,000,000.00
Acquisition Facility Commitment: $ 35,000,000.00
Letter of Credit Commitment: $ 2,000,000.00
Swing Line Commitment: $ 3,000,000.00
DOMESTIC LENDING OFFICE:
Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Operations
------ ----------
Attn: Xxxx Xxxxxxxxx/Xxxxxxx Xxxxxx Attn: Xxxxx Xxxxxx
Tel: (000) 000-0000/(000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 or 000-0000 Xax: (000) 000-0000
EURODOLLAR LENDING OFFICE:
Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Operations
------ ----------
Attn: Xxxx Xxxxxxxxx/Xxxxxxx Xxxxxx Attn: Xxxxx Xxxxxx
Tel: (000) 000-0000/(000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 or 000-0000 Xax: (000) 000-0000
SCHEDULE II
-----------
EMPLOYMENT/NON-COMPETE AGREEMENTS
---------------------------------
Employment Agreement dated January 23, 1991 between Xxxxxxx X. Xxxxxxx and Iron
Age Investment Company.
Employment Agreement dated November 20, 1995 between Xxxxxxx X. Xxxxx, Iron Age
Corporation and Iron Age Holdings Corporation.
Employment Agreement dated November 20, 1995 between Xxxxx X. XxXxxxxxx, Iron
Age Corporation and Iron Age Holdings Corporation.
Employment Agreement dated October 20, 1995 between Xxxxxx X. Xxxxxx, Iron Age
Corporation and Iron Age Holdings Corporation.
Employment Agreement dated August 1, 1994 between Xxxxxxxx X. Xxxxxxxx and
Falcon Shoe Mfg. Co.
Non-Competition Agreement dated August 1, 1994 between Xxxxxxxx X. Xxxxxxxx and
Falcon Shoe Mfg. Co.
Employment Agreement dated February 26, 1997 between Xxxxxx X. Xxxxxx, Iron Age
Corporation and Iron Age Holdings Corporation.
Consulting Agreement dated February 1, 1998 between Xxx X. Xxxx and Iron Age
Corporation.
Employment Agreement dated April 6, 1998 between Xxxxxx Xxxxx and Iron Age
Canada Ltd.
Employment Agreement dated April 7, 1998 between Xxxxxx Xxxxxxxx and Iron Age
Canada Ltd.
SCHEDULE III
------------
RETIREMENT BENEFIT PLAN PAYEES
------------------------------
The following individuals have the right to the following annual cash payments
until their death (or, if later, the death of their surviving spouse):
Xxx. Xxxxx X. Childs $ 48,000
Mr. Xxxxx Xxxxxx $ 2,400
--------
$ 50,400
========
SCHEDULE 3.01(H)
----------------
SURVIVING DEBT
--------------
DESCRIPTION AMOUNT*
----------- ------
Capital Lease Obligations $ 754,000
Retiree Benefits
Xxx. Xxxxx X. Childs, Mr. Xxxxx Xxxxx $ 269,000
Xxxxxx Deferred Compensation $ 247,000
----------
$ 516,000
Deferred Income Taxes, Net $6,309,000
Accounts Payable Overdue by more than 60 days $ 0
Other Notes Payable $ 208,000
TOTAL $7,787,000
===== ==========
______________________
*As of 1/31/98
SCHEDULE 3.01(K)(XXIII)
-----------------------
BLOCKED ACCOUNTS
----------------
BANK NAME AND ADDRESS ACCOUNT NUMBER
--------------------- --------------
Iron Age Holdings Corporation
-----------------------------
PNC Bank of Delaware 00-0000-0000
000 Xxxxxxxx Xxxxxx Xxx. 000
Xxxxxxxxxx, XX 00000
Iron Age Investment Co.
----------------------
PNC Bank of Delaware Checking Acct:
000 Xxxxxxxx Xxxxxx. Ste. 327 00-0000-000
Xxxxxxxxxx, XX 00000
Falcon Shoe Mfg. Co.
-------------------
Xxx Xxxx xx Xxxxx 0000000
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Iron Age Corporation
--------------------
PNC Bank 1001739581
Fifth Avenue and Wood Street 1001739602
Xxxxxxxxxx, XX 00000 1004405333
National Bank of Geneva 274718677
0 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
Bath National Bank 536701423
000 Xxxx Xxxxxx 000000000
Xxxx Xxx, XX 00000
SCHEDULE 4.01(A)
----------------
PART I
------
IRON AGE HOLDINGS CORPORATION INVESTOR GROUP*
--------------------------------------------
Number of Outstanding Shares of
-------------------------------
Owner Common Stock Series A
----- ------------ --------
Preferred Stock
---------------
Fenway Partners Capital Fund, L.P. 87,374.192 0
Banque Nationale de Paris 924.994 0
FPIP, LLC 679.856 0
Natio vie Developpment 549.996 0
FPIP Trust, LLC 377.522 0
New York Life Insurance Company 6,545.55 1,000
American Home Assurance Company 3,272.78 500
---------- ---
Total Outstanding 99,624.89 1,500
----------------- ========== =====
PART II
-------
IRON AGE HOLDINGS CORPORATION SHARE OWNERSHIP
---------------------------------------------
================================================================================
TYPE OF # OF SHARES # OF
CORPORATION OUTSTANDING STOCK AUTHORIZED SHARES OWNED BY
----------- ----------------- ---------- --------
ISSUED
------
--------------------------------------------------------------------------------
Iron Age Corporation Common Stock 1000 1000 Iron Age
Holdings
Corporation
================================================================================
_____________________________
* All of the stockholders of Iron Age Holdings Corporation have entered into
a Stockholders' Agreement dated February 26, 1997 ("Agreement") and the shares
listed below are subject to the terms of that Agreement.
SCHEDULE 4.01(B)
----------------
SUBSIDIARIES *
------------
IRON AGE CORPORATION (IAC)
--------------------------
================================================================================
JURIS. OF AUTHORIZED OUTSTANDING % OWNED
SUBSIDIARY INCORPORATION SHARES SHARES BY IAC
---------- ------------- ------ ------ ------
--------------------------------------------------------------------------------
Iron Age Investment Delaware 1,000 Shares of 1,000 100%
Company Common Stock
--------------------------------------------------------------------------------
Iron Age Canada, Ltd. Canada Unlimited 100 100%
Shares of
Common Stock
--------------------------------------------------------------------------------
Falcon Shoe Mfg. Co. Maine 14,000 Shares of 9,800 100%
Common Stock
--------------------------------------------------------------------------------
Iron Age de Mexico Mexico 100 Shares of 100 1%
Common Stock
================================================================================
IRON AGE HOLDINGS CORPORATION (IAHC)
------------------------------------
================================================================================
JURIS. OF AUTHORIZED OUTSTANDING % OWNED
SUBSIDIARY INCORPORATION SHARES SHARES BY IAC
---------- ------------- ------ ------ ------
--------------------------------------------------------------------------------
Iron Age Corporation Delaware 1,000 Shares of 1,000 100%
Common Stock
================================================================================
IRON AGE INVESTMENT COMPANY (IAIC)
----------------------------------
================================================================================
JURIS. OF AUTHORIZED OUTSTANDING % OWNED
SUBSIDIARY INCORPORATION SHARES SHARES BY IAC
---------- ------------- ------ ------ ------
--------------------------------------------------------------------------------
Iron Age de Mexico Mexico 100 Shares of 100 99%
Common Stock
================================================================================
_____________________
*None of the subsidiaries has issued any options, warrants, rights of
conversions or purchase or similar rights.
IRON AGE CANADA LTD.
--------------------
None
FALCON SHOE MFG. CO.
--------------------
None
IRON AGE DE MEXICO S.A. DE C.V.
-------------------------------
None
SCHEDULE 4.01(D)
----------------
AUTHORIZATIONS, APPROVALS, ACTIONS, NOTICES AND FILINGS
-------------------------------------------------------
Termination of the Credit Agreement dated February 26, 1997, as amended, (the
"Existing Credit Agreement") by and among Iron Age Corporation (formerly IAH
Acquisition Corp.), Iron Age Holdings Corporation (formerly IA Holdings Corp.),
the Lender Parties party thereto and Banque Nationale de Paris as Issuing Bank
and as Agent for the Lender Parties.
SCHEDULE 4.01(L)
----------------
PLANS, MULTIEMPLOYER PLANS AND WELFARE PLANS
--------------------------------------------
Iron Age Holdings Corporation 1997 Stock Option Plan.
Iron Age Corporation Profit Sharing Retirement Plan as amended through January
1, 1994, as further amended April 20, 1995.
Falcon Shoe Mfg. Co. Profit Sharing Plan dated July 15, 1991, as amended
November 21, 1994.
Falcon Shoe Mfg. Co. 401(k) Savings Plan dated December 27, 1993, as amended
March 10, 1994.
Xxxxx Shoes Inc. Cash Accumulation and Retirement Selection Plan.
Iron Age Corporation Group Annuity Contract dated January 24, 1995.
Iron Age Corporation Group Benefit Plans:
Long Term Disability Plan dated September 1, 1996.
Travel Accident Insurance Plan dated January 30, 1990.
Blue Cross/Blue Shield Medical Plan dated October 1, 1996.
Group Life/ADD Plan dated September 1, 1996.
Educational Assistance Plan dated January 1, 1992.
Prevailing Fee 100 Group Medial Plan dated March 1, 1994.
U.S. Healthcare HMO Plan dated October 1, 1987.
Blue Choice HMO Plan dated December 1, 1991.
Hospital/Medical/Surgical Plan of Puerto Rico dated November 1, 1996.
Cafeteria Plan dated August 1, 1993.
Falcon Shoe Mfg. Co. Welfare Benefit Plans:
Medical Group Subscriber Agreement.
LTD Contract dated April 7, 1993.
Group Life Contract dated August 10, 1993.
Weekly Indemnity Contract dated August 10, 1993.
Falcon Flex Plan dated July 1, 1994.
Iron Age Canada, Ltd. Group Insurance Policy dated December 7, 1993.
Xxxxxx Deferred Compensation Letter dated August 1, 1994.
SCHEDULE 4.01(U)
----------------
ENVIRONMENTAL MATTERS
---------------------
None.
SCHEDULE 4.01(Z)
----------------
OPEN YEARS
----------
January 31, 1998
January 25, 1997
January 27, 1996
January 28, 1995
SCHEDULE 4.01(FF)
-----------------
EXISTING DEBT
-------------
DESCRIPTION AMOUNT*
----------- ------
Existing Credit Facility:
Working Capital Advance $ 22,000,000
Acquisition Advances $ 2,000,000
Term Note A $ 18,000,000
Term Note B $ 19,800,000
Term Note C $ 24,750,000
12 1/2% Senior Subordinated Notes due
February 26, 2006:
New York Life Insurance Company $ 10,000,000
American Home Assurance Company $ 5,000,000
TOTAL $116,550,000
----- ------------
______________________________
*Amount as of April 24, 1998
SCHEDULE 4.01(GG)
-----------------
OWNED REAL PROPERTY
-------------------
GROSS BOOK VALUE FAIR MARKET VALUE
---------------- ------------------
Property at 000 Xxxxx Xxxxxx $2,463,281 Approx. $2,500,000
in the village of Penn Yan,
Xxxxx County, New York
(owned by Iron Age
Corporation)
SCHEDULE 4.01(HH)
-----------------
LEASED REAL PROPERTY
--------------------
[Attached]
SCHEDULE 4.01(II)
-----------------
INVESTMENTS
-----------
SUBSIDIARY STOCK OF EACH LOAN PARTY
-----------------------------------
See Schedule 4.01(b)
INTERCOMPANY NOTES AMOUNT*
------------------ ------
Iron Age Corporation:
--------------------
Note Receivable from Iron Age Canada Ltd. $ 990,000
Note Receivable from Iron Age Mexico $ 55,000
Iron Age Investment Company:
---------------------------
Note Receivable from Iron Age Corporation $36,550,000
-----------
TOTAL $37,595,000
===== ===========
________________________________
*As of 1/31/98
SCHEDULE 4.01(JJ)
-----------------
INTELLECTUAL PROPERTY
---------------------
IRON AGE CORPORATION
U.S. TRADEMARKS
---------------
================================================================================
TRADEMARK REGISTRATION NO. REGISTRATION DATE
--------- --------------- -----------------
--------------------------------------------------------------------------------
IRON AGE MAXIMUM & Design 1,671,179 1/7/92
--------------------------------------------------------------------------------
IRON AGE SPORTWORK II 1,677,695 3/3/92
--------------------------------------------------------------------------------
GRABBER 928,349 2/1/72
--------------------------------------------------------------------------------
FREEDOM TOE 1,276,282 5/1/84
--------------------------------------------------------------------------------
METAPRO 949,859 1/2/73
--------------------------------------------------------------------------------
SAFE-GARD 1,082,707 1/17/88
--------------------------------------------------------------------------------
IRON AGE & Design 1,212,263 10/12/82
--------------------------------------------------------------------------------
IRON AGE 634,888 9/25/56
--------------------------------------------------------------------------------
MIGHTY TOUGH 1,919,851 9/19/95
--------------------------------------------------------------------------------
MIGHTY TOUGH & Design 1,919,852 9/19/95
--------------------------------------------------------------------------------
IRON AGE PLUS 2,112,932 11/11/97
--------------------------------------------------------------------------------
ROUGH CREEK 2,082,503 7/22/97
--------------------------------------------------------------------------------
OIL RESISTANT GUARANTEED SHU- 780,371 11/17/64
LIFE SOLE
--------------------------------------------------------------------------------
XXXXX ATVS BUILT TO GO 1,919,898 9/19/95
ANYWHERE (Stylized Letters)
--------------------------------------------------------------------------------
XXXXX ATVS BUILT TO GO 1,967,884 4/16/96
ANYWHERE
--------------------------------------------------------------------------------
XXXXX ATVS U.S.A. 2000 SERIES 1,901,251 6/20/95
(Stylized Letters)
--------------------------------------------------------------------------------
XXXXX ATVS U.S.A. 2000 SERIES 1,905,063 7/11/95
--------------------------------------------------------------------------------
ATVS BY XXXXX 1,477,784 2/23/88
--------------------------------------------------------------------------------
TUF-SHOT 1,344,676 6/25/85
--------------------------------------------------------------------------------
TWO-SHOT 1,201,228 7/13/82
--------------------------------------------------------------------------------
XXXXX MASTER CRAFT CUSHIONED 1,133,194 4/15/80
COMFORT (and Design)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
XXXXX SHOES & Design 785,262 2/16/65
--------------------------------------------------------------------------------
XXXXX FREE-WAY CUSHIONED SHOES 671,243 12/16/58
& Design
================================================================================
U.S. SERVICE MARKS
------------------
--------------------------------------------------------------------------------
SERVICE XXXX REGISTRATION NO. REGISTRATION DATE
------------ --------------- -----------------
--------------------------------------------------------------------------------
IRON AGE 1,966,512 4/9/96
--------------------------------------------------------------------------------
IRON AGE PLUS 2,120,443 12/9/97
================================================================================
U.S. TRADEMARK APPLICATIONS
---------------------------
================================================================================
TRADEMARK SERIAL NO. FILING DATE
--------- --------- -----------
--------------------------------------------------------------------------------
RUFFHIDES 74/491,094 2/15/94
--------------------------------------------------------------------------------
SPORTWORK 319,367 7/3/97
--------------------------------------------------------------------------------
ARMOR 75X-TRA LITE & Design 342,582 8/18/97
--------------------------------------------------------------------------------
SAFE-GARD 357,666 9/16/97
--------------------------------------------------------------------------------
HIGH-WIDE PROFILE II 418,663 1/9/98
--------------------------------------------------------------------------------
THE SOLES OF WORKING AMERICA 462,254 4/6/98
================================================================================
U.S. SERVICE XXXX APPLICATIONS
------------------------------
None.
FOREIGN TRADEMARKS
------------------
================================================================================
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE
--------- ------- --------------- -----------------
--------------------------------------------------------------------------------
IRON AGE Benelux 488,506 12/7/90
--------------------------------------------------------------------------------
IRON AGE Canada 223,537 10/7/77
--------------------------------------------------------------------------------
IRON AGE Germany 1,022,860 11/27/80
--------------------------------------------------------------------------------
IRON AGE Denmark 2318-1981 9/4/81
--------------------------------------------------------------------------------
IRON AGE France 1,621,306 11/27/80
--------------------------------------------------------------------------------
IRON AGE United Kingdom 1,144,205 11/19/80
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
IRON AGE Mexico 419,038 3/8/92
--------------------------------------------------------------------------------
IRON AGE Norway 110,047 12/3/81
--------------------------------------------------------------------------------
IRON AGE Taiwan 434,908 3/16/89
--------------------------------------------------------------------------------
IRON AGE China 642,723 5/21/93
--------------------------------------------------------------------------------
IRON AGE Sweden 176,255 4/16/81
--------------------------------------------------------------------------------
IRON AGE Hong Kong 04875 12/30/93
--------------------------------------------------------------------------------
IRON AGE United Kingdom 1,512,133 9/9/92
--------------------------------------------------------------------------------
IRON AGE Japan 0000000 8/8/97
--------------------------------------------------------------------------------
IRON AGE Korea 386476 12/15/97
================================================================================
FOREIGN SERVICE MARKS
---------------------
================================================================================
SERVICE XXXX COUNTRY REGISTRATION NO. REGISTRATION DATE
------------ ------- --------------- -----------------
--------------------------------------------------------------------------------
IRON AGE Korea 41362 2/19/98
================================================================================
FOREIGN TRADEMARK APPLICATIONS
------------------------------
================================================================================
TRADEMARK COUNTRY SERIAL NO. FILING DATE
--------- ------- --------- -----------
--------------------------------------------------------------------------------
SPORTWORK Mexico 318,773 1/7/98
--------------------------------------------------------------------------------
ARMOR 75X-TRA Canada 322,891 1/20/98
LITE & Design
--------------------------------------------------------------------------------
XXXXX Canada 865,487 12/31/97
--------------------------------------------------------------------------------
SPORTWORK Canada 865,488 12/31/97
--------------------------------------------------------------------------------
SPORTWORK II & Canada 865,489 12/31/97
Design
--------------------------------------------------------------------------------
IRON AGE Philippines 102,856 9/20/95
--------------------------------------------------------------------------------
SAFE-GARD Canada 869,158 2/11/98
--------------------------------------------------------------------------------
SAFE-GARD Mexico 325,962 3/16/98
================================================================================
FOREIGN SERVICE XXXX APPLICATIONS
---------------------------------
================================================================================
SERVICE XXXX COUNTRY SERIAL NO. FILING DATE
------------ ------- --------- -----------
--------------------------------------------------------------------------------
IRON AGE Philippines 102857 9/20/95
================================================================================
IRON AGE INVESTMENT COMPANY
U.S. REGISTRATIONS
------------------
None.
FOREIGN SERVICE XXXX REGISTRATIONS
----------------------------------
================================================================================
SERVICE XXXX COUNTRY REGISTRATION NO. REGISTRATION DATE
------------ ------- ---------------- -----------------
--------------------------------------------------------------------------------
IRON AGE Mexico 509304 10/31/95
--------------------------------------------------------------------------------
IRON AGE Canada TMA 473,865 3/26/97
================================================================================
FALCON SHOE MFG. CO.
U.S. TRADEMARKS
---------------
================================================================================
TRADEMARK REGISTRATION NO. REGISTRATION DATE
--------- --------------- -----------------
--------------------------------------------------------------------------------
XXXXXX 895,088 7/21/70
--------------------------------------------------------------------------------
XXXXXX TYROLEANS 740,975 11/20/62
--------------------------------------------------------------------------------
XXXXXX WAFFLE-STOMPERS 973,456 11/20/73
--------------------------------------------------------------------------------
GREAT FOOTWEAR FOR THE GREAT 1,119,327 5/29/79
OUTDOORS
--------------------------------------------------------------------------------
THE WAY OF NATURE. . .THRU THE 1,110,565 1/2/79
HANDS OF MAN
--------------------------------------------------------------------------------
RUGGARDS (Stylized) 419,794 3/5/46
--------------------------------------------------------------------------------
TRU-TRAK 1,437,386 4/21/87
--------------------------------------------------------------------------------
TRUKKERS 993,107 9/10/74
--------------------------------------------------------------------------------
XXXXXX DOUBLE COVERAGE TOES & 1,855,821 9/27/94
DESIGN
--------------------------------------------------------------------------------
DURAFLEX 843,731 2/6/68
--------------------------------------------------------------------------------
WIDE TRAK 2,030,521 1/14/97
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ARMOR-TECH 2,051,944 4/15/97
================================================================================
STATE REGISTRATION
------------------
================================================================================
TRADEMARK STATE REGISTRATION NO. REGISTRATION DATE
--------- ----- --------------- -----------------
--------------------------------------------------------------------------------
XXXXXX Vermont 4,553 3/29/73
================================================================================
FOREIGN REGISTRATIONS
---------------------
================================================================================
TRADEMARK COUNTRY REGISTRATION NO. REGISTRATION DATE
--------- ------- --------------- -----------------
--------------------------------------------------------------------------------
XXXXXX Austria 142,074 5/21/92
--------------------------------------------------------------------------------
XXXXXX Canada 225,957 2/10/78
TYROLEANS
--------------------------------------------------------------------------------
DUNHAM'S Italy 586,393 12/29/92
--------------------------------------------------------------------------------
XXXXXX Japan 1,620,432 9/29/83
--------------------------------------------------------------------------------
XXXXXX Germany 2,027,548 1/5/93
--------------------------------------------------------------------------------
XXXXXX Spain 1,683,507 4/3/95
--------------------------------------------------------------------------------
XXXXXX Canada 460,625 8/2/96
--------------------------------------------------------------------------------
DUNHAM'S France 1,613,236 9/30/90
--------------------------------------------------------------------------------
DUNHAM'S Switzerland 383,406 7/19/91
================================================================================
FOREIGN APPLICATIONS
--------------------
================================================================================
TRADEMARK COUNTRY SERIAL NO. FILING DATE
--------- ------- --------- -----------
--------------------------------------------------------------------------------
ARMOR-TECH Canada 801,437 1/10/96
================================================================================
TRADEMARK APPLICATIONS TO BE FILED
----------------------------------
================================================================================
TRADEMARK COUNTRY
--------- -------
--------------------------------------------------------------------------------
THE SOLE XX XXXXXXX XXXXXXX Xxxxxx Xxxxxx
--------------------------------------------------------------------------------
XXXXX Xxxxxx Xxxxxx
================================================================================
SCHEDULE 5.02(A)(III)
---------------------
EXISTING LIENS
--------------
Personal Property Liens
-----------------------
Amcom/Norwest Financial Leasing Inc. Security Agreement covering two leased
copiers.
CIT Group/Amplicon, Inc. Security Agreement covering leased equipment relating
to the Mobile Point-of-Sale (POS) System.
Schedule 4.01(hh)
-----------------
Leased Real Property
--------------------
IRON AGE CORPORATION
ALL LOCATIONS WITH LEASE INFORMATION
[Lessee is Iron Age Corporation except where otherwise noted (see pp. 8&9)]
LOCATION LOCATION Annual Expiration
Code (ADDRESS) ST COUNTY** Lessor Rent* Date
---- --------- -- -------- ------ ----- ----
170 Mobile, Al Mobile Unit AL Mobile Springdale Stores, Inc. $18,300.00 4/30/99
Yester Oaks Shopping Center
0000X Xxxxxxx Xxxx.
Xxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx Xxxx XX Xxxxxxxxx Birmingham Realty $20,400.00 8/31/02
000 Xxxxxxxxxx Xxxx., Xxxxx X Xxxxxxx
Xxxxxxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Maricopa Westco Properties of Phoenix $12,068.52 8/31/02
0000 XxXxxxxx Xxxx
Xxxxxxx, XX 00000
000 Xxxxxx X/X Xxxxx XX Pima Xxxxxxx Properties $ 8,656.20 12/14/98
0000 Xxxx 00xx Xxxxxx
Xxxxxx, XX 00000
000 Xxx Xxxx Xxxxxx XX Santa Xxxxx Xxxxxxx Trust Properties $28,200.00 12/31/01
0000 Xxx Xxxxxxxx Xxx.
Xxx Xxxx, XX 00000
000 Xxx Xxxxxx Xxxxxx Xxxx XX Orange VSW Investments $25,284.00 11/30/98
0000 Xxxxx Xxxxxx
Xxxx 0
Xxxxx Xxxx, XX 00000
000 Xxx Xxxxxxx Xxxxxx Xxxx XX Los Angeles Xxxx-Xxxxxx-Commerce #1 Assoc. $25,505.28 10/14/99
0000 Xxxxxxxx Xxx.
Xxxxxxxx, XX 00000
177 Los Angeles Xxxxx CA Los Angeles Commerce Properties $52,356.00 04/30/98
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
178 Torrance, CA CA Los Angeles Xxxxx Xxxxxx, Xx. $34,128.00 06/30/02
00000 Xxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
000 Xxxx Xxxxxx, XX XX Los Angeles Xxxxxx Center, Inc. $34,128.00 06/30/00
000 Xxxxx Xxxxx Xxx.
Xxxx Xxxxxx, XX 00000
172 Denver Mobile Unit CO Xxxxxxxxx Xxxxx Enterprises $13,332.00 4/30/01
0000 Xxxx Xxxx
Xxxxx Xxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX New Haven 321 B.P.R. LLC $24,779.52 9/30/00
000 Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
000 Xxx-Xxxxxxxx Xxxxxx Xxxx XX New Castle Airport Business Center VI $21,729.24 2/28/00
Airport Business Center
000 Xxxxxxx Xxxx.
Xxxxx X
Xxx Xxxxxx, XX 00000
000 Xxxxx Xxxxxx Xxxx XX Hillsborough Xxxxx X. Xxxxxxx $14,058.00 12/31/03
0000 Xxxx Xxxxxxxx
Xxxxx, XX 00000
000 Xxxxxxxxxxxx Xxxxxx Xxxx XX Xxxxx St. Augustine Road Investments $10,255.20 5/31/01
Commerce Park
0000-0 Xxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
000 Xx. Xxxxxxxxxx Xxxxxx Xxxx XX Broward PBP Venture Corp-Xxxxxxxx $16,992.24 12/31/98
Xxxxxxx Xxxxx Xxxxxxxxxx Xxxx
Xxxxx 000
0000 X. X. 00xx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Xxxxxxx B&B Management, Inc. $16,956.36 07/31/00
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Richmond Meybohm Realty $10,500.00 5/31/99
Aarbour Crossing
0000 Xxxxx Xxxxxxx Xx.
Xxxxxxx, XX 00000
000 Xxxxxx Xxxx, XX XX Xxxxxxx X.X. Limited $ 9,799.92 month to month
0000 Xxxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
000 Xxxxxx Xxxxxx Xxxx XX Rock Island Xxxxx Xxx Sung $15,000.00 7/31/98
Xxxxx Xxxx Xxxxx, Xxxx #0
0000 00xx Xx.
Xxxxxx, XX 00000
000 Xxxxxxxx Xxxx Xxxxxx Xxxx XX Xxxx Xxxxx Industries $26,448.00 10/31/98
00000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
185 Oaklawn, IL IL Xxxx Xxxxxxx Xxxxxxxx $26,400.00 12/02/99
0000 X. Xxxxxx Xxx.
Xxxxxxx, XX 00000
-2-
186 Melrose Park, IL IL Xxxx Xxx Alport $18,759.96 07/31/00
0000 Xxxxx Xxx.
Xxxxxxx Xxxx, XX 00000
000 Xxxxxxxxxxxx Xxxxxx Xxxx XX Xxxxxx F&R Realty Co. $12,600.00 5/31/00
0000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx Xxxx XX Xxxxxxxxx XxXxx Ltd. $24,269.16 4/30/01
0000 Xxxx Xxxxxx Xxxx,
Xxxxx 00
Xxxxxxxxxx, XX 00000
156 Baton Rouge Mobile Unit LA E. Baton Lennar Partners $18,562.56 3/31/99
Southridge Center Rouge
00000 Xxxxxxx Xxxx., Xxx. X0
Xxxxx Xxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Worcester KRS Realty Trust d/b/a Heritage $21,735.00 8/31/98
Heritage Business Park
0000 Xxxxxxx Xx., Xxxxx 0X
Xxxxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Bristol Xxxxx Xxxx XxXxxxxx $29,400.00 1/31/01
000 Xxxxx Xxxx Xx., Xx. 000
Xxxxxxxxx, XX 00000
000 Xxxxxxxx, XX MA Plymouth Stonehill Shoppes Inc. $44,313.00 10/31/01
Xxxxxxx'x Rainbow Square
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Baltimore MIE Development $19,956.00 4/30/00
0000 Xxxxxx Xxx., Xxx. X (xxxxx)
Xxxxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Cumberland Portland Associates Trust $16,320.00 1/31/01
Bradlee's Plaza
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
188 Lewiston, ME ME Androscoggin Equity Properties $ 4,800.00 12/31/99
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Oakland Madison Square $15,984.00 11/9/99
00000 Xxxx X. Xxxxxx Xxx. Xxxx.
Xxxxxxx Xxxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Kent Giant Development $15,000.00 2/28/00
0000-X Xxxxxx Xxx., XX
Xxxxxxxx, XX 00000
183 Eastpointe, MI MI Macomb East Detroit Investment $24,000.00 6/30/99
00000 Xxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
-3-
184 Westland, MI MI Xxxxx Xxxxx & Xxxxxx (U.S.) $16,263.96 10/31/03
0000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
000 Xxxxxxxxxxx Xxxxxx Xxxx XX Hennepin St. Croix Medical, Inc. $10,992.00 7/31/98
0000 X. Xxxxx Xx., Xxxxx 000
Xxxxxxxxxxx, XX 00000
000 Xxxxxxxxxxxx Xxxxxx Xxxx XX Xxxxxxx Xxxxxx South Development Co. $13,151.16 1/31/00
0000 Xxxxx Xxxxxx Xxxx
Xxxxx Xxxxxx Shopping Center
Xxxxxxxxxxxx, XX 00000
000 Xx. Xxxxx Xxxxxx Xxxx XX Xx. Xxxxx Xxxxx Xxxx Joint Venture $23,400.00 2/28/00
00000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Mecklenburg Vinson Realty Co. $13,197.00 12/31/99
Stock Port Business Center
0000 Xxxxxxxxxxxx Xxxx - 000X
Xxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx Xxxx XX Xxxxxxxx Xxxxxx X. XxXxxxxx $18,000.00 6/30/99
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Durham Highwoods/Forsyth Limited $21,299.52 5/31/01
Creekstone Crossing Ser Partner
Center
0000 X. Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx, XX 00000
195 Charlotte, NC NC Mecklenburg Xxxxxxxxx Associates $17,499.96 05/31/98
0000 X. Xxxxxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
000 Xxx Xxxxxx Xxxxxx Xxxx XX Middlesex AAA Budget Self Storage $24,375.00 10/14/02
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx Xxxx XX Xxxxxx Xxxx Realty Corp. $29,712.00 1/31/01
000 Xxxxx 00 Xxxx
Xxxxxxxxxxx, XX 00000
000 Xxxxxx Xxxx, XX XX Xxxxxx Xxxxxx Xxxx Associates $25,404.24 08/31/02
0000 Xxxxx 00 Xxxx
Xxxxxx Xxxx, XX 00000
000 Xxxxx, XX XX Passaic Construction Realty Co., Inc. $44,493.12 06/16/01
Willow Square
000 Xxxx 00
Xxxxx, XX 00000
194 Union, NJ NJ Union Rondo Music, Inc. $32,721.96 11/30/00
0000 Xxxxx 00
Xxxxx, XX 00000
-4-
000 Xxxxxxxxxxx Xxxxxx Xxxx XX Bernalillo Southeast Xxxxxxxxxx Ltd. $16,380.00 03/31/99
0000 Xxxxxxxxxx X.X.
Xxxxxxxxxxx, XX 00000
005 Penn Yan Warehouse #2/ NY Xxxxx Xxxxx County XXX $31,800.00 2/28/99
Central Tractor
0 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx Xxxx.
Xxxx Xxx, XX 00000
000 Xxxxxx Xxxxxx Xxxx XX Xxxxxx Xxxx Electronics Corp. $21,312.00 8/31/99
000 Xxxxxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
000 Xxxxx Xxxxxx Xxxx XX Xxxx Xxxx Urban Plaza Associated $21,600.00 12/16/01
Xxxx Xxxxx Plaza
000 Xxxx Xxxx
Xxxxx, XX 00000
000 Xxxxxxxx Xxxxx XX Nassua Ronrett Realty Company $23,970.72 09/30/01
0000 Xxxxxxx Xxx.
Xxxxxxxx, XX
000 Xxxxxx Xxxxxx Xxxx XX Saratoga J. Xxxx Xxxx $30,658.56 03/05/03
00 Xxxxxxxx Xxxx.
Xxxxxxx Xxxx, XX 00000
209 Penn Yan Store NY Xxxxx Xxxx X. Xxxxxx $19,200.00 9/30/00
000 Xxxx Xxxxxx
Xxxx Xxx, XX 00000
180 Rochester, NY NY Monroe Xxxxxx Xxxxxxx $21,600.00 06/30/01
2862 Q. Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
000 Xxxxxxxxxxx, XX NY Erie M.S. Real Estate $21,675.00 month to month
0000 Xxxxxx Xxx.
Xxxxxxxxxxx, XX 00000
000 Xxxxxxxx, XX NY Kings Xxxxxx Associates $51,000.00 month to month
00-00 Xxxxxx Xx.
Xxxxxxxx, XX 00000
190 Yonkers, NY NY Westchester Xxxxxxx Ind. Dev. Corp. $67,143.96 10/26/98
000 Xxxxxxx Xxxx Xxx.
Xxxxxxx, XX 00000
191 Westbury, NY NY Nassau Ronret Realty Company $79,104.12 09/30/01
000 Xxxxxxx Xxx.
Xxxxxxxx, XX 00000
000 Xxxxxxxx, XX NY Kings Xxxxxxx Investors $17,031.00 05/31/98
0000 Xxxxxxxx Xxx.
Xxxxxxxx, XX 00000
-5-
197 Bohemia, NY NY Suffolk Connetquot Associates $ 24,600.00 12/31/02
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Cuyahoga Meadowbrook Market Square $ 16,800.00 0/00/00
Xxxxxxxxxxx Xxxxxx Xxxxxx
00000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx Xxxx XX Xxxxxxxx Xxxxxxx Real Estate Partners $ 14,263.56 7/31/99
0000 Xxxx Xx., Xxxxx X
Xxxxxxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Xxxxxxxx Xxxxxxxx Real Estate Corp. $ 13,599.96 4/30/03
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
000 Xxxxxxxx Xxxx Xxxxxx Xxxx XX Oklahoma Windsor Park Associates $ 12,600.00 6/30/00
0000 X. Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000
163 Tulsa Mobile Unit OK Tulsa Security Square Shopping $ 14,400.00 9/30/99
00000 X. 00xx Xxxxxx
Xxxxx, XX 00000
137 Portland Mobile Unit OR Multnomah Xxxxx Xxxx $ 15,900.00 7/16/98
000 X. X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
001 Iron Age PA Allegheny Xxxxxx X. & Xxxxxxx X. Xxxxxxx $255,023.41 9/30/99
Xxxxxxxx Xxxxx Xxxxx,
Xxxxx 000
Xxxxxxxxxx, XX 00000
0000 Xxxx Xxxx. $ 100.00
Exhibition Floater
000 Xxxxxxxxxx Xxxxxx Xxxx XX Allegheny Xxxxxx Xxxxxxxxx $ 48,000.00 5/31/03
0000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
000 Xxxx Xxxxxx Xxxx XX York X.X. Xxxx Associates, Inc. $ 17,700.00 9/30/00
0000 Xxxxxxxxxx Xxxxxxx
Xxxx, XX 00000
000 Xxxx Xxxxxx Xxxx XX Erie Terra Erie Associates $ 7,200.00 9/30/98
Eastway Plaza
0000 Xxxxxxx Xxxx (Xx. 00)
Xxxx, XX 00000
125 Manati Mobile Unit PR Manati Xxxxxxx Xxxxxx Xxxxx $ 24,000.00 0/00/00
Xxxx #0, Xxxxxxxxx 44.7
BO. Xxxxxxx #00, Xxxxx 0
Xxxxxx, XX 00000
-6-
142 Caguas Mobile Unit PR Caguas Turabo Development, Inc. $ 22,500.00 0/00/00
Xxxxx Xxxx Xx. 000, Xx. 0
Xxxxxx, XX 00000
000 Xxxxx Xxxxxx Xxxx XX Xxxxx Xxxxx Xxxxxxxx Logo $ 13,800.00 0/00/00
Xxx Xxxxxxxx Xxx., #00
Xxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Florence Xxxxxx X. XxXxxxxx $ 10,800.00 6/30/99
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
129 Spartanburg Mobile Unit SC Spartanburg Xxxxxxx Development Assoc. $ 9,600.00 5/31/00
Cleveland Village Shopping Cen
0000 Xxxxxxxxx Xxx. Xxxxx 0
Xxxxxxxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Richland McWill Partnership $ 30,000.00 11/30/06
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Xxxxxx XXXX Associates $ 16,020.00 9/30/99
0000 Xxxxxxxxxxxx Xx.
Xxxxx 00
Xxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Xxxxxxxx Xxxxxxx X. Xxxxxxx III $ 17,100.00 4/30/00
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Xxxx West End Phasde I $ 11,199.96 9/17/00
000 Xxxx Xxx Xxx.
Xxxxxxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Xxxxxxxx J. Xxxx Xxxxxx $ 5,160.00 8/31/99
Xxxxxx Business Center
Xxxx 0, Xxxx. 0
000 X. Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
230 Goodyear Tire & Rubber Co. TN Obion Xxxxxxxx Xxxxxxx $ 2,273.16 month to month
0000 Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
000 Xx Xxxx Xxxxxx Xxxx XX El Paso Xxxxxxx X. Xxxxxxxx $ 18,588.00 12/31/00
0000 Xxxx Xxxxxxx.
Xxxxx 0
Xx Xxxx, XX 00000
000 Xxxxxx Xxxxxx Xxxx XX Dallas Xxx Xxxxx $ 18,000.00 12/31/01
0000 Xxxx Xxxxx
Xxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Xxxxxx T.T. Xxxxxxx $ 24,000.00 12/31/00
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
-7-
000 Xxx Xxxxxxx Xxxxxx Xxxx XX Bexar N.P. Partners, Ltd. $ 16,860.00 5/31/99
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, XX 000000
000 Xxxxxxxx Xxxxxx Xxxx XX Xxxx Dell Xxxxxxxx $ 12,000.00 10/31/05
0000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Xxxxxx Xxxx X. Xxxxxx $ 11,880.00 9/30/98
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
150 Austin Store TX Xxxxxx Xxxxxx Center, Inc. $ 18,000.00 12/31/98
00000 Xxxxxxx Xx
Xxxxxx, XX 00000
000 Xxxx Xxxx Xxxx Xxxxxx Xxxx XX Salt Lake Xxxxxx Partnership $ 16,868.28 12/31/99
0000 Xxxxx Xxxxxxx Xx.
Xxxx Xxxxxx Xxxx, XX 00000
000 Xxxxxxxx Xxxxxx Xxxx XX Bedford Xxxxxx XxXxxxx $ 16,800.00 6/30/00
Popular Forest Center
X.X. Xxx 0000, Xxxxx 0
Xxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX Independent Northampton Corporate Park Assoc. $ 18,636.00 4//30/00
Northampton Business Center
0000 Xxxxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
222 Goodyear VA Independent Xxxxxxxx Xxxxxxx $ 2,587.68 month to month
0000 Xxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
000 Xxxxxxx Xxxxxxxx Xxxxxxxxxxx XX GE Capital Modular Space $ 5,655.36 9/10/98
X.X. Xxx 000
Xxxxxxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxx XX King Cumberland Industrial Center $ 18,600.00 10/31/01
00000 00xx Xxx., Xxxxx
Xxxxxxxx X
Xxxx, XX 00000
000 Xxxxxxxxx Xxxxxx Xxxx XX Milwaukee Megal Development Corp. $ 17,100.00 4/30/99
Unit D
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
000 Xxxxx Xxx Xxxxx XX Xxxxx Walnut Center Company $ 7,332.00 12/31/99
0000 Xxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
161 Parkersburg WV Xxxx Xxxxxx X. Xxxxxx $ 6,600.00 7/31/99
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
-8-
Iron Age Canada, LTD CN Ontario Von-Land Corporation Limited C$50,151.96 6/30/01
000 Xxxxx Xxxxxxxxx Xx.,
Xxxx 0
Xxxxxxx, XX L4K-3R2
122 Iron Age Canada, LTD CN Alberta Capital Ideas LTD C$10,500.00 1/31/01
Bay #000
000 00 Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
000 Xxxx Xxx Xxxxxx, XXX XX Xxxxxxx Xxxxxxxx Colliers C$32,432.28 04/30/02
00000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X IT2
160 Iron Age Canada, LTD CN Ontario Associates Corporation of C $5,400.00 11/30/98
0000 Xxxxxx Xxxxxx Xxxx Xxxxx Xxxxxxx and
Xxxxxxxx, Xxxxxxx X0X 0X0 Ongiara Properties, Inc. C$46,963.08 08/30/00
161 Iron Age Canada, LTD CN Ontario St. Catherines Equities Limited C$26,551.50 07/31/02
000 Xxxxxxx Xxxx
Xx. Xxxxxxxxxx, Xxxxxxx X0X 0X0
162 Iron Age Canada, LTD CN Ontario Xxxx & Xxxxx Xxxxx C$35,310.00 month to month
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx X0X XX0
163 Iron Age Canada, LTD CN Ontario Enterprise Property Group C$18,877.20 05/31/00
000 Xxxxxx Xxxxxx Xxxx
Xxxx X
Xxxxxx, Xxxxxxx X0X 0X0
164 Iron Age Canada, LTD CN Ontario Xxxx and Xxxx Xxxxxxx C$14,775.24 month to month
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx Simoce Plaza
Oshawa, Ontario L1H 4J5
165 Iron Age Canada, LTD CN Ontario Xxxx Tillney Warrington C$15,079.20 month to month
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx XXX 0X0
Iron Age Canada, LTD CN Ontario Comro Developments C$32,945.88 12/31/99
0000 Xxxxxx Xxxxxx East
Units 14 & 15'
Xxxxxx, Xxxxxxx X0X 0X0
Iron Age De Mexico S.A. MX Quimica Industrial Fronteriza N$184,833.60 12/31/99
DE C.V.
Cattetera Juaraz Porvenir 1568 9-B
Centro Comercial Satelite
Ciudad Xxxxxx, Chihuahua
Falcon Shoe Manufacturing ME Androscoggin Xxx Continental $216,917.28 03/31/99
Company
0 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
-9-
Falcon Shoe/Xxxxx ME Androscoggin Equity Properties $122,268.80 12/31/99
Manufacturing
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxx Shoes (old MA Plymouth Concord Foods, Inc. $121,263.60 10/31/98
corporate offices)
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
* Excludes CAM and Taxes
** County not included in lease
-10-
EXHIBIT A-1 TO THE
CREDIT AGREEMENT
FORM OF WORKING CAPITAL NOTE
$ [__________] Dated: ________ __, ____
FOR VALUE RECEIVED, the undersigned, IRON AGE CORPORATION, a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY [to the order of]/1/
--------
____________________ [or its registered assigns]/2/ (the "Lender") for the
------
account of its Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Working Capital
Advances (as defined below) owing to the Lender by the Borrower pursuant to the
Credit Agreement dated as of April 24, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"; terms defined
----------------
therein unless otherwise defined herein being used herein as therein defined)
among the Borrower, IRON AGE HOLDINGS CORPORATION, a Delaware corporation, as
Parent Guarantor, the Lender and certain other Lender Parties party thereto, and
Banque Nationale de Paris, as Agent, Swing Line Bank and Initial Issuing Bank on
the dates and in the amounts specified in the Credit Agreement.
The Borrower promises to pay to the Lender [or its registered
assigns]/2/ interest on the unpaid principal amount of each Working Capital
Advance from the date of such Working Capital Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America for the account of the Lender to Banque Nationale de Paris, as
Agent, at the Agent's Account, in same day funds. Each Working Capital Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender in its
books and, prior to any transfer hereof, endorsed on the grid attached hereto,
which is part of this Promissory Note; provided, however, that the failure of
-------- -------
the Lender to make any such recordation or endorsement shall not affect the
Obligations of the Borrower under this Promissory Note or the Obligations of any
of the Loan Parties under or in respect of any of the Loan Documents.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Working Capital
---------------
Advances") by the Lender to the Borrower from time to time in an aggregate
--------
amount
__________________________
/1/ Delete these brackets, but include the bracketed language, if the
applicable Lender Party will not be relying on the portfolio interest
---
exception; delete both the brackets and the bracketed language if the
applicable Lender Party will be relying on the portfolio interest
----
exception.
/2/ Delete both the brackets and the bracketed language if the applicable
Lender Party will not be relying on the portfolio interest exception;
---
delete the brackets, but include the bracketed language, if the applicable
Lender Party will be relying on the portfolio interest exception.
----
2
not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Working
Capital Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified. The
Obligations of the Borrower under this Promissory Note and the other Loan
Documents, and the Obligations of the other Loan Parties under or in respect of
the Loan Documents, are secured by the Collateral referred to, and as provided
in, the Collateral Documents.
This Promissory Note shall be governed by and construed in accordance
with, the laws of the State of New York.
IRON AGE CORPORATION
By____________________________________
Name:
Title:
3
ADVANCES AND PAYMENTS OF PRINCIPAL
=======================================================================
AMOUNT OF
WORKING AMOUNT OF UNPAID
CAPITAL PRINCIPAL PAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
=======================================================================
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EXHIBIT A-2 TO THE
CREDIT AGREEMENT
FORM OF ACQUISITION NOTE
$ [__________] Dated: ________ __, ____
FOR VALUE RECEIVED, the undersigned, IRON AGE CORPORATION, a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY [to the order of]/1/
--------
____________________ [or its registered assigns]/2/ (the "Lender") for the
------
account of its Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Acquisition Advances
(as defined below) owing to the Lender by the Borrower pursuant to the Credit
Agreement dated as of April 24, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; terms defined therein unless
----------------
otherwise defined herein being used herein as therein defined) among the
Borrower, IRON AGE HOLDINGS CORPORATION, a Delaware corporation, as Parent
Guarantor, the Lender and certain other Lender Parties party thereto, and Banque
Nationale de Paris, as Agent and Swing Line Bank, on the dates and in the
amounts specified in the Credit Agreement.
The Borrower promises to pay to the Lender [or its registered
assigns]/2/ interest on the unpaid principal amount of each Acquisition Advance
from the date of such Acquisition Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America for the account of the Lender to Banque Nationale de Paris, as
Agent, at the Agent's Account, in same day funds. Each Acquisition Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender in its
books and, prior to any transfer hereof, endorsed on the grid attached hereto,
which is part of this Promissory Note; provided, however, that the failure of
-------- -------
the Lender to make any such recordation or endorsement shall not affect the
Obligations of the Borrower under this Promissory Note or the Obligations of any
of the Loan Parties under or in respect of any of the Loan Documents.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of acquisition advances (the
"Acquisition Advances") by the Lender to the Borrower from time to time in an
--------------------
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each such
Acquisition Advance being evidenced by this
_____________________________
/1/ Delete these brackets, but include the bracketed language, if the
applicable Lender Party will not be relying on the portfolio interest
---
exception; delete both the brackets and the bracketed language if the
applicable Lender Party will be relying on the portfolio interest
----
exception.
/2/ Delete both the brackets and the bracketed language if the applicable
Lender Party will not be relying on the portfolio interest exception;
---
delete the brackets, but include the bracketed language, if the
applicable Lender Party will be relying on the portfolio interest
----
exception.
2
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The Obligations of the Borrower under this
Promissory Note and the other Loan Documents, and the Obligations of the other
Loan Parties under or in respect of the Loan Documents, are secured by the
Collateral referred to, and as provided in, the Collateral Documents.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
IRON AGE CORPORATION
By____________________________________
Name:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
=======================================================================
AMOUNT OF AMOUNT OF UNPAID
ACQUISITION PRINCIPAL PAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
=======================================================================
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EXHIBIT B TO THE
CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
[Date of Notice of Borrowing]
Banque Nationale de Paris,
as Agent for the Lender Parties to the Credit
Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: _________
Ladies and Gentlemen:
The undersigned, Iron Age Corporation, a Delaware corporation (the
"Borrower"), refers to the Credit Agreement dated as of April 24, 1998 (as
---------
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement", the terms defined therein unless otherwise defined herein being used
---------
herein as therein defined), among the Borrower, the Lender Parties party thereto
and Banque Nationale de Paris, as Swing Line Bank and as Agent for Lender
Parties, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the Borrower hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
------------------
2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is requested to be
_________ __, ____.
(ii) The Facility under which the Proposed Borrowing is requested is
the [Acquisition] [Working Capital] Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is requested to
be $__________.
[(v) The initial Interest Period that is requested for each
Eurodollar Rate Advance to be made as part of the Proposed Borrowing is
[one] [two] [three] [six] __________ month[s].]/1/
___________
/1/ To be included for a Proposed Borrowing requested to be comprised of
Eurodollar Rate Advances.
2
The Borrower hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in each Loan
Document are true and correct on and as of such date, both before and after
giving effect to the Proposed Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to a
specific date other than the date of the Proposed Borrowing, in which case,
as of such specific date;
(B) no event has occurred and is continuing, or would result from the
Proposed Borrowing or from the application of the proceeds therefrom, that
constitutes a Default;
[(C) the Proposed Borrowing shall be applied in compliance with the
terms set forth in Section 5.02(f)(xi) of the Credit Agreement;]/2/
[(C) the sum of the Loan Values of the Eligible Collateral (as
determined based on the most recent Borrowing Base Certificate delivered to
the Lender Parties under the Credit Agreement) exceeds the aggregate
principal amount of the Working Capital Advances to be outstanding plus the
----
Letter of Credit Advances outstanding plus the aggregate Available Amount
----
of all Letters of Credit outstanding, respectively, as follows:
(1) Borrowing Base Availability Total from the most
recent Borrowing Base Certificate _____________
(2) Working Capital Advances Outstanding _____________
(3) Aggregate Principal Amount of Letter of
Credit Advances Outstanding _____________
(4) Aggregate Principal Amount of Swing
Line Advances Outstanding _____________
(5) Total Available Amount of all Letters of
Credit Outstanding _____________
(6) Total Working Capital Availability
((1) less (2) less (3) less (4) less (5)) _____________
---- ---- ---- ----
[(7) Total Unused Commitments _____________]/3/
________________
/2/ To be used for a Proposed Borrowing consisting of Acquisition Advances.
/3/ To be used for a Proposed Borrowing consisting of Working Capital Advances.
3
Very truly yours,
IRON AGE CORPORATION
By:____________________________
Name:
Title:
EXHIBIT C TO THE
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of April 24, 1998,
(as amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"; unless otherwise defined herein, capitalized terms are used herein
---------
as therein defined) among Iron Age Corporation, a Delaware corporation (the
"Borrower"), the Lender Parties party thereto and Banque Nationale de Paris, as
--------
Swing Line Bank, Initial Issuing Bank and as Agent for the Lender Parties.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto
hereby agree as follows:
1. The Assignor hereby sells and assigns, without recourse except as
to the representations and warranties made by the Assignor herein, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as hereinafter defined) equal to the
percentage interest specified on Schedule 1 hereto of all outstanding rights and
obligations under the Facility or Facilities specified on Schedule 1 hereto.
After giving effect to such sale and assignment, the Commitments of each of the
Assignor and the Assignee and the amount of the Advances owing to each of the
Assignor and the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) hereby represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under or in respect of
any Loan Document or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Note or Notes held by the Assignor and requests
that the Agent exchange such Note or Notes for a new Note or Notes payable to
the order of the Assignee in an amount equal to the Commitments assumed by the
Assignee pursuant hereto or new Notes payable to the order of the Assignee in an
amount equal to the Commitments assumed by the Assignee pursuant hereto and to
the order of the Assignor in an amount equal to the Commitments retained by the
Assignor under the Credit Agreement, respectively, as specified on Schedule 1
hereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon
2
the Agent, the Assignor or any other Lender Party and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender Party; and (vi) attaches any U.S. Internal Revenue
Service forms required to be provided by it under Section 2.12 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for Acceptance and recording in the Register by
the Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance and recording in the Register
--------------
of this Assignment and Acceptance by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording in the Register by the Agent,
as of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender Party thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement (and, if
this Assignment and Acceptance covers all or the remaining portion of the
Assignor's rights and obligations under the Credit Agreement, such Assignor
shall cease to be a party thereto).
6. Upon such acceptance and recording in the Register by the Agent,
from and after the Effective Date, the Agent shall make all payments under the
Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
8. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
As to the _______ Facility in respect of which an interest is being assigned:
Percentage interest of such Facility assigned: __________%
amount of Facility assigned to such Assignee
--------------------------------------------
aggregate amount of such Facility
Commitment assumed by the Assignee: $__________
Commitment retained by the Assignor: $__________
Aggregate outstanding principal amount of Advances assigned: $__________
Aggregate outstanding principal amount of Advances retained: $__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
Effective Date (if other than date of acceptance and recording in the
Register by Agent) /1/: _________ __, ____
__________________
/1/ This date should be no earlier than Five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
[NAME OF ASSIGNOR], as Assignor
By ________________________________
Name:
Title:
Dated: _________ __, ____
[NAME OF ASSIGNEE], as Assignee
By ________________________________
Name:
Title:
Dated:_________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
ACCEPTED /2/[AND APPROVED] this
____ day of ___________ __, ___
BANQUE NATIONALE DE PARIS,
as Agent
By _____________________________
Name:
Title:
By _____________________________
Name:
Title:
/3/[ACCEPTED this ____ day of ______, ____
BANQUE NATIONALE DE PARIS,
as Issuing Bank
By _____________________________
Name:
Title:
By _____________________________
Name:
Title:]
_____________
/2/ Required only if the Assignee is an Eligible Assignee solely by reason of
clause (vii) of the definition of Eligible Assignee.
/3/ Required only (i) if the Assignee is an Eligible Assignee solely by reason
of clause (vii) of the definition of Eligible Assignee and (ii) such
Assignee is becoming a Working Capital Lender.
/4/[APPROVED this __ day of _________, ____
IRON AGE CORPORATION
By ___________________________
Name:
Title:]
________________
/4/ Required only (i) if the Assignee is an Eligible Assignee solely by reason
of clause (vii) of the definition of Eligible Assignee and (ii) no Default
shall have occurred and be continuing as of the Effective Date.
EXHIBIT J TO THE
CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
To: Banque Nationale de Paris
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
Telecopy: (000) 000-0000
IRON AGE CORPORATION
--------------------
Date: ___________
(1) Inventory Net Availability
[Total from Schedule I] $_________
(2) Accounts Receivable Net Availability
[Total from Schedule II] $_________
(3) Total Borrowing Base Availability
[1 plus 2] $_________
----
(4) Working Capital Facility $_________
(5) The lesser of (3) and (4) $_________
(6) Working Capital Advances Outstanding $_________
(7) Aggregate Principal Amount of
Letter of Credit Advances Outstanding $_________
2
(8) Total Available Amount of all
Letters of Credit Outstanding
a. Standby Letters of Credit $_________
b. Trade Letters of Credit $_________
c. Total Letters of Credit [(a) plus (b)] $_________
(9) Total Working Capital Availability
[(5) less (6) less (7) less (8)] $_________
This report is submitted pursuant to the Credit Agreement dated as of
April 24, 1998 among Iron Age Corporation, a Delaware corporation (the
"Borrower"), the Lender Parties (the "Lender Parties") that are, or may from
-------- --------------
time to time become, party thereto and Banque Nationale de Paris, as Swing Line
Bank and as Agent for the Lender Parties thereunder. All of the current
accounts referred to in this report (the "Accounts") have been assigned to the
--------
Agent, and the Agent has been granted a lien on and security interest in the
Accounts pursuant to the Collateral Documents. Unless otherwise indicated,
capitalized terms are used herein as defined in the Credit Agreement.
The undersigned hereby certifies that (i) the amounts and the
representations set forth above are true and correct in all material respects,
(ii) the calculations determined herein were determined in accordance with the
Credit Agreement and (iii) except as noted, none of the Accounts referred to in
this report falls within the ineligible or prohibited categories as noted in the
Credit Agreement. We further confirm the above mentioned assignment and grant
of a lien on and security interest in the Accounts to the Agent.
IRON AGE CORPORATION
Date: ___________________ By:_______________________
Name:
Title:
SCHEDULE I
Inventory Net Availability
--------------------------
(a) Gross Inventory $________
Less: Ineligible Inventory
----
--------------------------------------------------------------------------------
(b) Inventory consisting of "perishable agricultural $________
commodities" within the meaning of the Perishable
Agricultural Commodities Act of 1930, as amended, and the
regulations thereunder, or on which a Lien has arisen or
may arise in favor of agricultural producers under
comparable state or local laws
--------------------------------------------------------------------------------
(c) Inventory aggregating more than $500,000 at any single $________
location and located on leaseholds as to which the lessor has
not entered into a consent and agreement providing the
Agent with the right to receive notice of default, the right to
repossess such Inventory at any time and such other rights as
may be acceptable to the Agent
--------------------------------------------------------------------------------
(d) Inventory that is obsolete, unusable or otherwise unavailable $________
for sale
--------------------------------------------------------------------------------
(e) Inventory with respect to which the representations and $________
warranties set forth in Section 8 of the Security Agreement
applicable to Inventory are not true and correct
--------------------------------------------------------------------------------
(f) Inventory consisting of promotional, marketing, packaging $________
or shipping materials and supplies exclusive of boxes
containing shoes or boots
--------------------------------------------------------------------------------
(g) Inventory that fails to meet in any material respect all $________
standards imposed by any governmental agency, or
department or division thereof, having regulatory authority
over such Inventory or its use or sale
--------------------------------------------------------------------------------
(h) Inventory that is subject to any licensing, patent, royalty, $________
trademark, trade name or copyright agreement with any
third party from whom any Loan Party or any of its
Subsidiaries has received written notice of a material dispute
in respect of any such agreement
--------------------------------------------------------------------------------
(i) Inventory located outside the United States, Puerto Rico or $________
Canada, other than as permitted under paragraph (j) below
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
(j) Inventory that is not in the possession of or under the sole $________
control of the Borrower, IAK Acquisition, Falcon or IA
Canada, other than (i) up to $4,000,000 at any one time
outstanding of Inventory in transit to the Borrower, IAK
Acquisition, Falcon or IA Canada by common carrier,
which Inventory is owned by the Borrower, IAK
Acquisition, Falcon or IA Canada free and clear of all Liens
(other than Liens imposed by such common carrier in the
ordinary course of business in respect of the shipping of
such Inventory) and insured in accordance with Section
11(a) of the Security Agreement or Section 1.9 of the
Canadian Security Agreement with the Agent named as loss
payee under such insurance policy and (ii) any Inventory of
the Borrower, IAK Acquisition or Falcon located on any
customer's premises; provided that such Inventory must be
segregated from all inventory of such customer and must be
clearly identifiable as Inventory of the Borrower, IAK
Acquisition or Falcon; provided further that any such
Inventory on consignment on any customer's premises must
also be subject to UCC-1 protective filings;
--------------------------------------------------------------------------------
(k) Inventory consisting of work in progress $________
--------------------------------------------------------------------------------
(l) Inventory in respect of which the Security Agreement, the $________
Canadian Security Agreement or the Factor's Lien
Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first
priority lien or security interest in favor of the Agent for
the benefit of the Secured Parties securing the Secured
Obligations and as to which no other Liens exist, other than
Permitted Liens.
--------------------------------------------------------------------------------
(m) Other Ineligible Inventory $________
--------------------------------------------------------------------------------
(n) Total Ineligible Inventory [(sum of (b) through (m)] $________
--------------------------------------------------------------------------------
(o) Eligible Inventory [(a) less (n)] $________
--------------------------------------------------------------------------------
================================================================================
Inventory Net Availability at 50% of
Eligible Inventory [(o) multiplied by 50%] $========
---------- --
SCHEDULE II
Accounts Receivable Net Availability
------------------------------------
(a) Gross Receivables $________
Less: Ineligible Receivables
----
--------------------------------------------------------------------------------
(b) Receivables that do not arise out of the sale of goods or the $________
rendering of services in the ordinary course of the
Borrower's, Falcon's, IAK Acquisition's or IA Canada's
business
--------------------------------------------------------------------------------
(c) Receivables on terms other than those normal or customary $________
in the Borrower's, Falcon's, IAK Acquisition's or IA
Canada's business
--------------------------------------------------------------------------------
(d) Receivables owing (i) from any Loan Party or any of its $________
Subsidiaries or (ii) from any other Person that is an Affiliate
of the Borrower, Falcon, IAK Acquisition or IA Canada
other than Receivables owing by such Affiliate which arose
pursuant to transactions on terms which were fair and
reasonable and no less favorable to the Borrower, Falcon,
IAK Acquisition or IA Canada, as the case may be, than
those which would have been obtained in a comparable
arm's length transaction with a Person not an Affiliate
--------------------------------------------------------------------------------
(e) Receivables (i) more than 90 days past original invoice date $________
(but excluding up to $1,500,000 of Receivables not more
than 180 days past original invoice date) or (ii) more than 60
days past the date due
--------------------------------------------------------------------------------
(f) Solely with respect to Receivables owned by Falcon or IA $________
Canada, Receivables owing from, as determined as of
January 31, 1998 and thereafter on the first Business Day of
each fiscal quarter ended January 31, April 30, July 31 and
October 31, any Person (i) from which an aggregate amount
of more than 25% of the Receivables owing are (A) more
than 60 days past due or (B) in dispute or (ii) from which an
aggregate amount of 25% or less of the Receivables owing
are (A) more than 60 days past due or (B) in dispute, except
that, with respect to this clause (ii), only to the extent of
those Receivables which are more than 60 days past due and
are in dispute
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
(g) Receivables owing from any Person that has asserted any $________
claim, demand or liability, whether by action, suit,
counterclaim or other judicial or arbitral proceeding against
any Loan Party or any of its Subsidiaries; provided,
--------
however, that solely for the purposes of this paragraph (g),
-------
the term "Person" shall mean the invoiced division that is
the contractual obligor of such Receivable
--------------------------------------------------------------------------------
(h) Receivables owing from any Person to the extent such $________
Person shall take or be the subject of any action or
proceeding of a type described in Section 6.01(f) of the
Credit Agreement
--------------------------------------------------------------------------------
(i) Receivables representing any manufacturer's or supplier's $________
credits, discounts, incentive plans or similar arrangements
entitling any Loan Party to discounts on future purchase
therefrom
--------------------------------------------------------------------------------
(j) Receivables arising out of sales to account debtors outside $________
the United States, Puerto Rico or Canada, unless backed by
a letter of credit issued by a bank organized under the laws
of the United States, or any state thereof, and having a
combined capital and surplus of at least $500,000,000
--------------------------------------------------------------------------------
(k) Receivables arising out of sales on a xxxx-and-hold, $________
guaranteed sale, sale-or-return, sale on approval or
consignment basis or subject to any right of return, setoff or
charge-back
--------------------------------------------------------------------------------
(l) Receivables in respect of which the Security Agreement, the $________
Canadian Security Agreement or the Factor's Lien
Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first
priority lien on or security interest in favor of the Agent
for the benefit of the Secured Parties securing the Secured
Obligations and as to which no other Liens exist, other than
Permitted Liens
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
(m) Other Ineligible Receivables $________
--------------------------------------------------------------------------------
(n) Total Ineligible Receivables [sum of (b) through (m)] $________
--------------------------------------------------------------------------------
(o) Eligible Receivables [(a) less (n)] $________
================================================================================
Accounts Receivable Net Availability at 80% of
Eligible Receivables [(o) multiplied by 80%] $========
---------- --
EXHIBIT M-1 TO THE CREDIT
AGREEMENT AS SEPARATELY EXECUTED
BORROWER SOLVENCY CERTIFICATE
IRON AGE CORPORATION
I, Xxxxx XxXxxxxxx, Chief Financial Officer of Iron Age Corporation, a
Delaware corporation (the "Company") hereby certify that I am the Chief
-------
Financial Officer of the Company and that I am duly authorized to execute this
Solvency Certificate on behalf of the Company, which is hereby delivered
pursuant to Section 3.01(k)(xv) of the Credit Agreement dated as of April 24,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among the Company, Iron Age Holdings Corporation, a Delaware
-----------------
corporation, as Parent Guarantor, the Lender Parties from time to time party
thereto (the "Lender Parties") and Banque Nationale de Paris, as Swing Line Bank
--------------
and as Agent for the Lender Parties. Unless otherwise defined herein
capitalized terms defined in the Credit Agreement are used herein as therein
defined.
I further certify that I am familiar with the properties, businesses,
assets, finances and operations of the Company and its Subsidiaries and have
carefully reviewed the Transaction Documents and the contents of this Solvency
Certificate and, in connection herewith, I have reviewed such other
documentation and I have made such investigation and inquiries as I deem
necessary and prudent therefor. I further certify, on behalf of the Company,
that the financial information and assumptions that underlie and form the basis
for the representations and certifications made in this Solvency Certificate
were reasonable when made and were made in good faith and continue to be
reasonable as of the date hereof.
The Company understands that the Agent, the Lender Parties and the
Hedge Banks are relying upon the truth and accuracy of this Solvency Certificate
in connection with the transactions contemplated by the Loan Documents.
I do hereby further certify, on behalf of the Company, that:
1. I have reviewed the financial statements attached hereto as Annex
A of the Company prepared by its management, including forecasts relating to
balance sheets, income statements and cash flow statements of the Company (the
"Projected Financial Statements"), which were prepared on the basis of the
------------------------------
estimates and assumptions stated therein. The Projected Financial Statements
were prepared in good faith, fairly present the best estimate of the Company's
future financial performance and are reasonable in light of the business
conditions existing on the date hereof.
2. On the date hereof, both before and after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Credit Agreement and the other Transaction Documents, the fair value of the
property of the Company is greater than the total amount of liabilities,
including, without limitation, contingent, subordinated, absolute, fixed,
matured or unmatured and liquidated or unliquidated liabilities, of the Company.
3. On the date hereof, both before and after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Credit Agreement and the other Transaction Documents, the present fair saleable
value of the assets of the Company exceeds the amount that will be required to
pay the probable liabilities of the Company on its debts as they become absolute
and matured.
2
4. On the date hereof, both before and after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Credit Agreement and the other Transaction Documents, the Company is not engaged
in business or in a transaction, and is not about to engage in business or in a
transaction, for which its property would constitute an unreasonably small
capital.
5. The Company does not intend to, and does not believe that it
will, incur debts and liabilities that will be beyond its ability to pay such
debts or liabilities as they mature.
6. The Company does not intend, in consummating the transactions
contemplated by the Credit Agreement and the other Transaction Documents, to
hinder, delay or defraud either present or future creditors or any other Person
to which the Company is or will become, on or after the date hereof, indebted.
7. In reaching the conclusions set forth in this Solvency
Certificate, I have considered, on behalf of the Company, among other things:
(a) the cash and other current assets of the Company and its
Subsidiaries reflected in the financial statements of the Company delivered
to the Agent and the Lender Parties pursuant to Section 3.01(k)(xiv) of the
Credit Agreement;
(b) all unliquidated and contingent liabilities of the Company and
its Subsidiaries including, without limitation, any claims arising out of
pending or threatened litigation against any such Person or any of their
respective property and assets, and in so doing, the Company has computed
the amount of such liabilities as the amount that, in light of all the
facts and circumstances existing on the date hereof, represents the amount
that can reasonably be expected to become an actual or matured liability
(the "Contingent Liabilities");
----------------------
(c) all obligations and liabilities of the Company and its
Subsidiaries, whether matured or unmatured, liquidated or unliquidated,
disputed or undisputed, secured or unsecured, subordinated, absolute, fixed
or contingent, other than Contingent Liabilities;
(d) historical and anticipated growth in sales volume of the Company
and its Subsidiaries and in the income stream generated by the Company and
its Subsidiaries as reflected in, among other things, the cash flow
statements comprising part of the Projected Financial Statements;
(e) the customary sales terms and the trade payables and other
accounts payable of the Company and its Subsidiaries;
(f) the amount of the credit extended by suppliers and to customers
of the Company and its Subsidiaries;
(g) the amortization and mandatory commitment reduction requirements
set forth in the Credit Agreement, the anticipated interest payable on the
Advances made from time to time under the Credit Agreement and fees payable
under the Credit Agreement;
3
(h) the level of capital customarily maintained by the Company and
its Subsidiaries and other entities engaged in the same or similar business
as the business of the Company and its Subsidiaries; and
(i) the Projected Financial Statements.
Delivery of an executed counterpart of a signature page to this
Solvency Certificate by telecopier shall be effective as delivery of a manually
executed signature page hereof.
IN WITNESS WHEREOF, the undersigned has executed this Borrower
Solvency Certificate on behalf of the Company this 24th day of April, 1998.
IRON AGE CORPORATION
By: /s/ Xxxxx X. XxXxxxxxx
---------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Chief Financial Officer
EXHIBIT M-2 TO THE CREDIT
AGREEMENT AS SEPARATELY EXECUTED
PARENT GUARANTOR SOLVENCY CERTIFICATE
IRON AGE HOLDINGS CORPORATION
I, Xxxxx X. XxXxxxxxx, Chief Financial Officer of Iron Age Holdings
Corporation, a Delaware corporation (the "Parent Guarantor") hereby certify that
----------------
I am the Chief Financial Officer of the Parent Guarantor and that I am duly
authorized to execute this Solvency Certificate on behalf of the Parent
Guarantor, which is hereby delivered pursuant to Section 3.01(k)(xv) of the
Credit Agreement dated as of April 24, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among Iron Age
----------------
Corporation, a Delaware corporation, the Parent Guarantor, the Lender Parties
from time to time party thereto and Banque Nationale de Paris, as Swing Line
Bank and as Agent for the Lender Parties. Unless otherwise defined herein,
capitalized terms defined in the Credit Agreement are used herein as therein
defined.
I further certify that I am familiar with the properties, businesses,
assets, finances and operations of the Parent Guarantor and its Subsidiaries and
have carefully reviewed the Transaction Documents and the contents of this
Solvency Certificate and, in connection herewith, I have reviewed such other
documentation and information and I have made such investigation and inquiries
as I deem necessary and prudent therefor. I further certify, on behalf of the
Parent Guarantor, that the financial information and assumptions that underlie
and form the basis for the representations and certifications made in this
Solvency Certificate were reasonable when made and were made in good faith and
continue to be reasonable as of the date hereof.
The Parent Guarantor understands that the Agent, the Lender Parties
and the Hedge Banks are relying upon the truth and accuracy of this Solvency
Certificate in connection with the transactions contemplated by the Loan
Documents.
I do hereby further certify, on behalf of the Parent Guarantor, that:
1. I have reviewed the financial statements attached hereto as Annex
A of the Parent Guarantor prepared by its management, including forecasts
relating to balance sheets, income statements and cash flow statements of the
Parent Guarantor (the "Projected Financial Statements"), which were prepared on
------------------------------
the basis of the estimates and assumptions stated therein. The Projected
Financial Statements were prepared in good faith, fairly present the best
estimate of the Parent Guarantor's future financial performance and are
reasonable in light of the business conditions existing on the date hereof.
2. On the date hereof, both before and after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Credit Agreement and the other Transaction Documents, the fair value of the
property of the Parent Guarantor is greater than the total amount of
liabilities, including, without limitation, contingent, subordinated, absolute,
fixed, matured or unmatured and liquidated or unliquidated liabilities, of the
Parent Guarantor.
3. On the date hereof, both before and after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Credit Agreement and the other Transaction Documents, the present fair saleable
value of the assets of the Parent Guarantor exceeds the amount that
2
will be required to pay the probable liabilities of the Parent Guarantor on its
debts as they become absolute and matured.
4. On the date hereof, both before and after giving effect to the
consummation of the Refinancing and the other transactions contemplated by the
Credit Agreement and the other Transaction Documents, the Parent Guarantor is
not engaged in business or in a transaction, and is not about to engage in
business or in a transaction, for which its property would constitute an
unreasonably small capital.
5. The Parent Guarantor does not intend to, and does not believe
that it will, incur debts and liabilities that will be beyond its ability to pay
such debts or liabilities as they mature.
6. The Parent Guarantor does not intend, in consummating the
transactions contemplated by the Credit Agreement and the other Transaction
Documents, to hinder, delay or defraud either present or future creditors or any
other Person to which the Parent Guarantor is or will become, on or after the
date hereof, indebted.
7. In reaching the conclusions set forth in this Solvency
Certificate, I have considered, on behalf of the Parent Guarantor, among other
things:
(a) the cash and other current assets of the Parent Guarantor and its
Subsidiaries reflected in the financial statements of the Parent Guarantor
delivered to the Agent and the Lender Parties pursuant to Section
3.01(k)(xiv) of the Credit Agreement;
(b) all unliquidated and contingent liabilities of the Parent
Guarantor and its Subsidiaries including, without limitation, any claims
arising out of pending or threatened litigation against any such Person or
any of their respective property and assets and in so doing, the Parent
Guarantor has computed the amount of such liabilities as the amount that,
in light of all the facts and circumstances existing on the date hereof,
represents the amount that can reasonably be expected to become an actual
or matured liability (the "Contingent Liabilities");
----------------------
(c) all obligations and liabilities of the Parent Guarantor and its
Subsidiaries, whether matured or unmatured, liquidated or unliquidated,
disputed or undisputed, secured or unsecured, subordinated, absolute, fixed
or contingent, other than Contingent Liabilities;
(d) historical and anticipated growth in sales volume of the Parent
Guarantor and its Subsidiaries and in the income stream generated by the
Parent Guarantor and its Subsidiaries as reflected in, among other things,
the cash flow statements comprising part of the Projected Financial
Statements;
(e) the customary sales terms and the trade payables and other
accounts payable of the Parent Guarantor and its Subsidiaries;
(f) the amount of the credit extended by suppliers and to customers
of the Parent Guarantor and its Subsidiaries;
3
(g) the amortization and mandatory commitment reduction requirements
set forth in the Credit Agreement the anticipated interest payable on the
Advances made from time to time under the Credit Agreement and fees payable
under the Credit Agreement;
(h) the level of capital customarily maintained by the Parent
Guarantor and its Subsidiaries and other entities engaged in the same or
similar business as the business of the Parent Guarantor and its
Subsidiaries; and
(i) the Projected Financial Statements.
Delivery of an executed counterpart of a signature page to this
Solvency Certificate by telecopier shall be effective as delivery of a manually
executed signature page hereof.
IN WITNESS WHEREOF, the undersigned has executed this Solvency
Certificate on behalf of the Parent Guarantor this 24th day of April, 1998.
IRON AGE HOLDINGS CORPORATION
By: /s/ Xxxxx X. XxXxxxxxx
----------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Chief Financial Officer
